While it may seem obvious, for whatever reason, many small business owners don't do a good job of measuring their results.
When you're trying to make money in a business, not knowing where you stand on your key operational and financial numbers is akin to flying a plane in fog without your instrument panel.
So here are some reasons why measuring the processes and transactions that drive your success and then using that information to manage your business is so crucial to business survival and success:
- 1. Measurement is the first step to improvement. If you don't measure it, you don't know if what you're doing is getting better or
worse. - 2. Measurement says it's important. In a restaurant, not knowing your food cost, for example, tells your people food cost is not
important, so there's little or no consequence to improper portioning, waste, spoilage and even some food going out the back door. - 3. Measurement tells you how well your staff is performing. Good numbers and results are a strong indicator of good employee
performance. - 4. Measurement leads to smarter decisions. Measurement can take a lot of the emotion out of decision making. With numbers, decisions can
be based more on facts than feelings and personal preferences. - 5. Measurement leads to better understanding of your business. A very successful businessman once told us, "If you don't know your
numbers, you don't know your business."
Measuring your key processes and financial results can help your business perform better and make you and your people more effective at
what they do.
We can help you identify and measure the key numbers in your business. If you’re interested in finding out more, just email me at
lesley@thefriendlyaccountants.co.uk with the subject “Help me get the right measurements please...”.