Become more curious about what the numbers are saying about your business
Business Analysis is crucial to driving business results.
When a business owner manages by the numbers the financials for the business become more predictable, and then strategies can be implemented to continuously improve results. Anything measured is sure to improve, and when strategies are executed consistently to spur growth results can show up exponentially. Becoming a stronger numbers person as a business leader is essential, and it also spurs the competitive nature in people.
Use these 8 business strategies to help you lead your business towards becoming more analytical
Where the Business and Customer intersect on the model is a Business Essential called ANALYTICAL. Every process your business goes through to deliver your product/service, and every interaction a customer has with your business can be measured. When you manage by the numbers you gain better control of the business and can adapt quicker.
Becoming more analytical is one of two Business Essentials that impact the level of PRECISION in your business. When you manage by the numbers you create accountability focused on specific results. The result of improving Precision in your business is delivering an exceptional customer experience every time.
Establish a Culture of Predictable Growth
You as the business leader establish what's important to you, and you build around that. If growth is important for your business, clearly understanding how your business makes money is essential. Once you manage your business by the numbers you will see trends and opportunities making growth more predictable.
Develop Your Understanding of Business Financials
For many small business owners accounting is not an area of expertise so they either outsource or manage it on their own. Yet when financials are accurate there are financial statements that when digested tell a story. Once you learn to tap into the financials that are essential to your business you'll be energized to improve or grow specific areas of the business.
Use Success KPIs to Measure Areas for Growth and Opportunity
As you become more proficient with your financials there are going to be more calculations available that create key performance indicators. It's these calculations between income statement and other variables that create ratios from which you can begin comparing against other periods of time or industy standards. It's these success KPIs that help you performance manage your business.
Create 1-Page Reports as Scorecards and Dashboards
This strategy requires you to be able to work a spreadsheet or have someone who can help create a 1-page report for you and your managers. These become your most valuable tools to manage your business, outside your financial statement. Depending on your type of business your might have a daily or weekly Scorecard, and you should have a monthly Dashboard. This simplifies managing by the numbers.
Monitor Customer Analytics from Software and Apps
Financial reports aren't the only analytics your business has as a resource. Many types of businesses use software applications to capture customer information and data. Usually it's extensive and its reports aren't good. Once you identify the data you seek from these apps it's a process of combining it with data from other sources like financial statements. It's critical data for your Scorecards and Dashboards.
Develop a Strong Margins Mentality
It's hard not to get excited about top line growth, yet the health of the business lies in the margins. It all boils down to understanding variable and fixed costs, and depending on your type of business is going to vary greatly. This is where having past data and setting benchmarks can help guide and keep your business within the guardrails of profitability.
Measure Product & Service Delivery for Consistency
Customer expectations are real and based on your business' past performance. If delivery of product or service isn't within the scope of their expectations your customer experience declines and they will tell you about it. Measuring what your business is capable of and staying within those measures will create consistency, but maybe not growth. These numbers will indicate when systems are stretched.
Managing By the Numbers Enhances Precision
Business analysis is essential to enhancing precision within your business. Once you feel the power of numbers in your business you can't help but want to improve them, and so will your team members.