Fun with Numbers, Epilogue

During the past week I have looked at several key numbers we can use in managing our paint contracting business. There are certainly other numbers that we can and should utilize.

The importance of knowing your numbers cannot be overstated. Numbers provide us with objective measurements of past performance, and a means for making realistic projections about future performance.

It is certainly possible to run a successful business without a comprehensive grasp of one’s numbers. But it is also possible to paint the entire interior of a house with a 2” brush. The fact that something is possible does not mean that it is efficient or wise. If you were going to paint an interior you would use the tools that provide the greatest efficiency. You should do the same in operating your company.

Effectively understanding and using our numbers requires that we capture specific data. The greater the amount of that data the more accurate our numbers become. Small samplings can be very misleading due to aberrations. Numbers do fluctuate, sometimes significantly. Large samplings even out these fluctuations.

For example, a particular piece of marketing may not generate any leads one week and 5 leads the next. If we looked at each of these weeks independently we would draw vastly different conclusions.

It takes time to collect sufficient data. The sooner you begin collecting that data, the sooner you can make meaningful evaluations. It is also possible to reconstruct data by reviewing your records.

Developing a system for collecting data will make the process efficient and more useful. A simple written form can suffice. A simple spreadsheet can be used to compile and analyze the data. In other words, this does not need to be a complicated process.

If you do not have the necessary data, the time to start collecting it is now. The future will arrive. Your numbers will tell you how you got there.

© BEP Enterprises Incorporated 2008