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When it comes to measuring numbers inside your service-based business, most owners fall into one of two categories.

They either don’t measure much (which means they don’t have important data to help them make decisions and grow their business) or they measure everything…which means they’re stuck in data overload…and they’re not sure how to use the data they’ve got to move forward.

Looking at data inside your business is super important because one, NUMBERS DON’T LIE, and secondly, you cannot make decisions effectively if you don’t have the right information. 

Before you run away because you think numbers are boring, or dumb, like who has time for this…you don’t need to measure much in your business to keep your finger on the pulse of things. 

The good news is, there are actually only four critical numbers every service-business should be measuring. 4 numbers that can fit onto one piece of paper…heck it can even be a sticky note, that will tell you in ONE quick glance HOW things are going inside your business. If things are going well. Great! If things aren’t. These numbers will tell you AND give you an indication of WHERE you need to look in order to fix the problem and get back on track. It is important to note that whatever metrics you measure inside your business needs to be simple. If it’s overly complicated to get the metrics, it takes a ton of time or resources, you need to question whether the effort needed to actually track the metric is worth the information that metric is giving you. 

Side Note: For the super smart accountants listening to this episode…I know that you may have a list of other important metrics business owners should consider. The purpose of this episode is to get every business owner in the habit of looking at the numbers. We all want to be consistent with our health but if we ask ourselves to go to the gym every single day for 45 minutes chances are really high that we will either give up completely before or fall off the bus on day three because it simply feels too much. Start small. This would be the equivalent of committing to a five minute daily walk and building the habit of being fit.

Think about the dashboard in your car

In one two-second glance you can tell:
If you’re driving too fast
The engine is overheating.

That your left front tyre is losing pressure

That you need to change the oil
Or if you’re running low on fuel.

Looking at the dashboard instantly tells you whether everything is okay with your car, or if something needs your attention.

If you didn’t have the information on that dashboard then you would make a plan to drive to Cape Town but run out of fuel somewhere along the way. Likely with no petrol station in sight for days. It would be like driving to your destination blind. 

In business, we need to know in a similar way how things are going. In its simplest form, the numbers should tell you when things are not working. Metrics are simple measurements of what’s going on inside your business. You want it to tell you if business is flowing well. When it isn’t, the job of the metric is to tell you there's a problem. You should be able to use the data to inform you which changes you need to make in the actions you’re taking inside your business. 

There are four activities every business should measure. What those four numbers are exactly will depend on how YOU measure success for each of these four activities…and if you’re inside my program, the EffortLESS CEO then this is something I will personally help you set up. I suggest having at least one metric for each activity. Remember, this is not a game of death by numbers. We want to keep it simple in the beginning and then gradually build on it. If you are overwhelming yourself with a million different data points and it takes you hours to actually collect the information…then you’re not going to do it. 

Also, a metric doesn’t always need to be a number. It can also be as simple as did this thing happen, yes or no?

The four activities we want to measure and track inside your business is:

1. Attraction/Visibility

2. Conversion/Sales

3. Delivery

4. Collect/Cash

Let’s dive a bit deeper into each activity. I will also share some examples of metrics that you could measure. Remember. YOU need to ask yourself what metrics will make sense for YOUR business.

So, the guiding question you want to answer for yourself for each of these activities is: How do we measure progress or the lack thereof in this area of the business?

ATTRACTION/VISIBILITY

Let’s start with the first activity of the four - ATTRACTION (I also often refer to this activity as VISIBILITY) If you think about your business, people need to know you exist. You need to attract or be visible to potential customers or clients. So think about your business. HOW do you attract clients into your world?

Do you run Facebook ads? Do you go to networking events. Do you have referral partners or rely on word of mouth marketing?

If you run Facebook ads one metric you could be measuring is the number of email addresses (potential leads) you are adding to your database every week. 

If you use networking as a way to attract and meet new potential clients you could measure how many connections you make at these events per month.

Consider what needs to happen in order for you to be effective at attracting your ideal clients or making yourself visible to your potential clients. You want to measure the effectiveness of those actions. 

CONVERSION/SALES

The second action every business takes is converting potential clients into paying clients. Also known as Conversion or SALES. If your business is not turning potential clients into actual clients then you won’t be in business for long.

Some examples of metrics you could measure here are:

Number of clients that say yes on your consultation calls.

Number of proposals that get accepted.

Again, think about the actions you take to GET sales. How would you measure those actions’ effectiveness?

DELIVERY

Once you’ve signed a client. You now need to deliver on what you promised. You want to consider the milestones or phases your clients are going through in the process of delivery. And you want to measure and track the effectiveness of that process. At the end of the day, we want to deliver exceptional service to our best clients. Because when we do…they will keep coming back and also tell their friends. So when you consider the metrics you are going to track in this category, consider HOW you would measure whether you are actually delivering at the standard that you want to deliver at.

Example metrics you could track here is: delivery time or project completion. You could also measure feedback from clients. Like client satisfaction scores. Consider HOW you would know whether your process is working and what would tell you that delivery is not happening to standard.

COLLECT/CASH

The last category of actions is related to getting paid and managing the cash inside your business.

The COLLECT and delivery bucket are the two buckets where you will most likely be measuring more than just one metric. And again…don’t overwhelm yourself. Speak to your accountant and ask them for guidance here if you’re unsure what to measure or where to find the information.

Some example metrics can be your client retention rate. In other words, the percentage of clients who come back to purchase from you again.

You can measure things like how long it takes for your clients to pay outstanding invoices and work on ways to reduce the time so you collect cash faster. You can measure your revenue and profit. This category is such an important category and one that I see most business owners neglect completely. At the end of the day…cash flow is queen inside your business. You have to know what is going on with your money, you have to know whether you actually have enough cash in your business for the following couple of months. 

The metrics inside your business are critical to running your business like a CEO. You cannot make decisions effectively without the right information. And I get that this feels like a lot of work. And it’s hard to sometimes lift your head up from the day to day stuff that is happening inside your business that is fighting for your attention. But if you ignore your numbers…your business will suffer.

I have created a very simple CEO Dashboard that you can grab in the show notes of this episode (if you’re watching this video on Facebook then head over to my website, go to the podcast tab and find episode 143). And if you need help implementing this Dashboard in your own business, let’s hop on a call and discuss how I can help you inside my program, The EffortLESS CEO.

I heard someone say “Numbers aren’t sexy…until it is.” Give yourself this gift and spend a half an hour this week to decide how you will measure success in each of the four categories we discussed today so you can make confident decisions as the CEO of your business.

The link to the Dashboard video is here:

https://www.loom.com/share/a38ac9fd77fa4744a4b8755625974fdd?sid=cb6ceb2a-fc0d-47fd-8a27-9b552678f499

The link to the Dashboard sheet:

https://docs.google.com/spreadsheets/d/1fbjuk-zzN2r5Uz3ECcJCFP-jPLsXDg7d75sS8-tcpwM/copy?usp=sharing

I will see you again next week.

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