Fun with Numbers, Introduction

Knowing your numbers is one of the most important skills the owner of a paint contracting company should possess. Knowing your numbers allows you to make informed decisions, make reasonable projections, and manage the growth of your business.

Numbers tell us what happened, or what will happen (all things being equal). They are a powerful tool for analyzing past performance and projecting future performance. When we understand these numbers they reveal a very informative story.

This week I am going to write about some of these numbers and how we can use them to better manage our business.

To accurately know your numbers you must track certain information:
The source for each lead
The number of jobs sold
The amount of sales
Your advertising costs

This information can help us analyze our marketing, and in turn make better use of our advertising dollars. It can help us identify weaknesses in our skill set and where improvements can be made. It can help us project the results of changes in certain parts of our business.

There are many ways to track the information. One of the easiest, particularly in terms of analyzing the data, is to construct a spreadsheet. (Or you can purchase a pre-programmed Excel spreadsheet for $10. The spreadsheet will allow you to track and analyze your monthly advertising and sales statistics, as well as run various scenarios regarding the numbers discussed in this series.)

Knowing our numbers helps us see how one part of the business impacts another. It helps us understand that one action will have a ripple effect. More importantly, it helps us see what that effect will be.

Running your business by the numbers takes all of the guessing out of the equation. It allows us to make rational decisions. And perhaps most importantly, it’s a whole lot of fun.

© BEP Enterprises Incorporated 2008