If you want to make real progress with your business, you need to know where you are right now in all the key areas. This means studying the numbers. The challenge here, is that whilst many of us know what the numbers behind our business are, we don’t always know what they represent in real terms.
We need to add context to the numbers if we want to benefit from what they are telling us.
2 is a small number, sometimes!
I remember hearing a friend tell me that there were only 2 things that she didn’t like about her job. When you think about it, that sounds pretty impressive. After all, there are hundreds of elements to a job, right?
She then told me what those 2 things were and it painted a very different picture. The 2 things she didn’t like were:
- The people she worked with
- The company’s products
Numbers need context
Small business owners often obsess about their numbers, without focusing on the context and what the numbers actually mean to them.
Here’s an example of what I’m talking about. I’ve often heard people brag about the Google Page Rank of their company website or blog, without looking to see what that Page Rank number actually means for their business, in real terms. For instance, a high Page Rank, on a site with a poorly targeted readership, who seldom make business inquiries, is nothing to brag about. It’s actually a problem in urgent need of fixing.
Similarly, a business owner with a large social network may have the numbers to impress people, yet get little real value from their thousands of followers and friends. If they focus on the numbers, rather than the people behind those numbers, they miss everything that matters.
When context is applied, a person with a small, well connected social network may well be getting massively better results, than the “social media rock star” with thousands of people, who are distant and seldom connect with them.
The numbers are a vital part of business. In fact, without knowing all the important numbers, you can not succeed. This is why I believe we all need to set some time aside to learn what the message is, behind all the key numbers in our business, from the most obvious numbers; profits, turnover, cash flow etc, to the less obvious.