The Story Problem of Your Business: Solve It Now
Remember back in school when you were learning the ins and outs of math? Once we began feeling pretty good about our basic skills regarding addition, subtraction, multiplication and division, we were thrown a bit of a curve ball and were suddenly introduced to the concept of story problems.
Though you may not have even thought about these equations in 20+ years, today I want you to think about your business and how solving your very own story problem will make your business wildly successful. We’re not going to dive into the fact that a train left Chicago at 6:00am and was traveling 80 miles per hour heading west and there were 12 cows and 8 chickens in a field on the left…
What we are going to dive into is how important math is to your current situation and company results. Many years ago, one of my biggest mentors stated simply that business is just a math problem. Once you figure out how to solve the math equation, you'll have everything you’ve ever desired regarding your company.
Sure many factors enter our equation regarding resources, training, team members, and market conditions, but honestly at the end of the day, there is very basic math which lets us know how we’re doing. Too many contractors do the math by seeing if sales are increasing, but that is not the most important math. While there is relevance to growing the top line, all that matters is the bottom line.
I’m not going to get on my soap box about the importance of being bottom line focused today, but I do want you to challenge yourself when it comes to what math you are focusing on during your daily, weekly, monthly focus regarding your operation. If you are generating more revenue than it costs you to provide your services, you are winning. However, many factors go into this simple math.
A Daily Dashboard of some sort is an incredibly effective tool and one that all of my successful clients utilize. This can be a simple spreadsheet that is filled out by office staff each and every morning and emailed to the entire management team, department heads, or even have a physical team huddle if everyone is in the same location. This spreadsheet can be made up of all types of Key Performance Indicators that are important to you, but in the very least you’ll want to have number of calls ran, number of calls closed (conversion rate), average sales by department, future work coming up, and running totals vs. budget on a daily basis.
You can then spread this out to a weekly basis and ultimately review it with the Income Statement monthly when you have your financial review meeting. The more focused you become on math, the easier your business will be to run. You’ll charge what you need to charge in order to be profitable. You’ll have awareness and statistics to shed light on marketing campaigns that are not working. You’ll know by gross margin which departments are contributing the most to overhead, which ultimately will lead to profitability.
If you want better results, solve the “story problem” of your own company situation and enjoy having control of a fun and lucrative business to operate.
P.S. Want a free strategy session with me? Email me with some info about your company and we'll set a time to help you breakthrough to your next level!