“I see the new building, and the delivery trucks and all of the promotions she is running around town, she must be killing it with her business!”
You and I have both said it at some point.
We declare, “they are making money hand over fist!” when we see that promotion or branding somewhere in town.
It all looks so easy…just show up, money rolls in, people love working there and all is perfect.
That is rarely true.
Chaos is more consistently the norm for most business owners who are swimming in decisions, directions, confusion, and success swings just trying to hold it together while keeping a pristine, branded exterior.
Certainly there is a lot to continually think through day to day so here are three things that are important to monitor on a regular basis in your business, in fact we monitor them weekly in our business.
We call them the ABC’s and they make up the “Level Two Dashboard”. You may ask, “what is the Level One Dashboard?” It is actually just the “A” of the ABC’s I am about to share.
Here are the ABC’s of what you can be monitoring weekly or every-other-weekly in your business.
Darryl Lyons (author of Small Business Big Pressure) and I were having a conversation about financial elements in every business that must be tracked regularly and he surprised me with the simplicity of one of his points– watch your cash accounts.
Darryl mentioned that he reviews his cash accounts once per week.
Eyeballs on your cash weekly will allow you to watch it barometrically, checking for any major spikes or dips. It’s not a line by line drill down on isolated spending on things like $4.22 smoothie purchases, but instead a high level look to see the overall flow of your cash.
You need to see how the cash actually flows. Minor shifts are expected, but when the numbers climb or fall at a serious grade, that is when you know it is time to dig. Was there a big bill due? Did a massive check come in? Is money leaking?
One business owner we met with years ago was completely (and I mean completely) in the dark as to the amount of cash in his business accounts. His rationale, “they will tell me when it gets to low.” Not a good strategy.
Once per week or every other week, take a look at your cash accounts (yep, plural, “accounts”…go read Mike Michalowicz’ Profit First and IMPLEMENT).
Most businesses have some form of payables (what you owe) and receivables (what you are owed).
Once per week or every other week it is good to know what these are. For some of you it is easy to pinpoint how much you owe through a statement or a spreadsheet, for others it is more difficult. Either way, you have no excuse to not know payables like monthly subscriptions, vendor and subcontractor payments, facilities payments, payroll, and others.
Knowing this general payout will allow you to know what will be coming out of those accounts that you have already taken a look at over the coming weeks.
So instead of your account having $10,458…it actually has that PLUS whatever will be coming in over the coming weeks MINUS what will be going out over the coming weeks.
A simple “Aging” or “Receivables” report within your bookkeeping software will allow you to see what should be coming in by way of payments to the business.
On a basic spreadsheet you can a section showing all of your account balances, and then a section showing what you owe and what receivables you have outstanding.
We actually run this calculation every week:
Total Cash in our Accounts
= What the real time cash position IF we collected ALL receivables and PAID all payables
It’s just a number that is nice to know.
Finally, it is crucial to monitor your customer engagement with
- Existing Customers
- Non-Yet Customers
- Past Customers
This is where you track important metrics around marketing, engagement, and communication.
An Attorney may monitor:
- Existing Customers: number of cases won, gifts sent
- Non-Yet Customers: number of phone calls received to appointments set
- Past Customers: number of follow up calls placed
A Contractor may monitor:
- Existing Customers: weekly updates sent, special events delivered
- Non-Yet Customers: number of website leads, number of follow up appointments
- Past Customers: past customer “Happy Hour” participants
Whatever metrics are important for your particular business is what you will track. For Business On Purpose we track things like Podcast Downloads, Book Sales, 1-on-1 phone calls, and Coaching Hours among other items.
Is it possible to know every nook and cranny of your business? It is a challenge because business is dynamic, constantly changing and flowing. Monitor the ABC’s of your business– Accounts, Bookkeeping, and Customers and review them weekly and you will begin to punch chaos in the mouth.
THAT is when you know you are “killing it”.
Scott Beebe is the founder of Business On Purpose and the host of The Business On Purpose Podcast. He can be found at mybusinessonpurpose.com.