What You Measure, You Can Manage

Many small business owners aren’t sure how to manage their business in a way to create more profit.

They tend to focus on marketing their business and doing their job well – which are both vitally important.

In this post, I’m hoping to get you thinking about things in your business that can be measured in order to create more profit.

A New System

A Massachusetts restaurant has introduced a system whereby the waitstaff is rated by:

  1. per-customer sales, and
  2. customer satisfaction, as gauged by tips.

The highest rated staff members are given more tables and preferred schedules – leading to more profits for the restaurant, and happier employees.

It’s most likely that this exact system won’t work for your business.

However, it brings up a good question worth asking: What are you measuring in your business? Or, What are you tracking? – in order to improve performance, sales, results, or motivate your employees, (if you have any).

What Can You Measure In Your Business That Can Help You Manage For Greater Profits?

Peter Drucker is credited with saying, “If you can’t measure it, you can’t manage it.”

Without getting bogged down in whether that is actually true, let’s just say that most small business owners are missing some big opportunities by not finding aspects of their business to measure – and making changes based on what those measurements reveal.

This is actually what it means to manage your business.

Start Simple And Small

  • “How many networking events (or phone calls) does it take for you to land one new customer?”
  • “How does your ad with short copy compare to your ad with long copy in click-through rates?”
  • “How much non-billable time do you spend on each client?”

What is something you can track in your business that can provide you with useful information?

Look around your office, or studio. Consider the systems you use everyday. This doesn’t need to be something complicated or time-consuming.

Pick something to measure, look at the results, and then tweak your system to improve your results and earn more money.

Photo: flickr.com/photos/aussiegall