Do You Have a Handle On This?
You’re in business to make a profit. So, as a business coach, I always look at what your numbers are telling you about how you’re doing and, more specifically, where you’re getting the most return on the time, money, and effort you’re investing.
Yeah, like …
- How many clients do you have?
- How much did you make this month vs. last month vs. this month last year?
- What’s going on with your expenses, line item by line item?
- What’s it cost to generate a new client or customer? What’s the lifetime value of your average client?
- How many clients have you gotten from that networking group or that speaking engagement?
The list goes on.
What I’ve noticed over the years as a business coach, is many business owners don’t have a handle on their numbers, and they’re critically important. They tell you what’s working and what isn’t.
On the marketing front, they tell you what you should be doing more of and which strategies you should abandon or at least de-emphasize.
How well you know your numbers speaks volumes.
For example, I can ask two people the same simple question. How many clients do you have?
#1: Uh, I’m not sure.
#2: Let me think. I have 12 regularly scheduled clients and 2 more I work with intermittently. I have room for 3 more.
Those answers tell me immediately who’s serious and likely to do well vs. someone who may be running their business more like a hobby or an avocation than a bona fide money-making enterprise.
So, track your numbers. Know your numbers. Let your numbers help guide your direction and decision-making.
But I want to pass along an important caveat.
In many cases, your numbers won’t tell the whole story. They help you see where you are now and the direction things are trending. But there are always factors at play that are simply unknowable, and you have to honor that.
Sometimes, your intuition is a better guide than what the black and white figures on a screen are telling you. And sometimes, you do something because it’s the “right” thing to do vs. what the bottom line would dictate.
Here’s a real life example:
My Speaking & Tour Manager recently came up with a potential gig with an organization I’d spoken to a couple of times before.
But I’d have to dedicate 3 full days, pony up a minimum of $700 in expenses, and drive in crazy metropolitan traffic … for the opportunity to speak to 8 people? Doesn’t sound so great, does it?
Ah, not so fast. I looked at my results from the other two times I’d spoken there. Each time, I’d gotten a client.
But, it was only one. That’s a below par result, yet each client had a high lifetime value. One purchased multiple programs and the other was with me for over five years!
So, what to do?
Here’s where I went beyond the numbers to make a decision.
The thing that inspired me to say yes is that my two former clients were now on the leadership team of the organization and really wanted me to come. I couldn’t say no to them. It wouldn’t be right.
I made that decision independent of the numbers.
And then there are the imponderables. For example, what if someone in the audience was impressed and wanted me to train 30 of the top executives at a big tech company?
Well, that is, in fact, exactly what happened!
Plus, seven of the eight people attending signed up for complimentary coaching sessions, and two became clients.
That tiny room will net me 750 times my investment … maybe more!
There was no way to KNOW that would happen.
All you know is that something good and something big can always come of your interactions with others if you’re out there providing value to people.
So, yeah, the numbers are extremely important. But numbers are a left-brain thing.
Just don’t give them unquestioned authority to override your right brain and dictate your path forward, because, while they’re vitally important … they can’t tell you the “right” thing to do and they can’t magically account for the unforeseeable.
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