STUDY YOUR DATA

I'm often called in to consult with business
leaders who are confused, even terrified by what they
perceive to be a terrible business situation. Maybe sales
are down even though they’ve added more sales people.
Perhaps production costs are up and profits are plummeting.
Sometimes key people are leaving, and they don’t know why.
Granted, sometimes the answers are hard to find and we have
work to do, but often the answers are readily available.
Often the answers are sitting right on their desk in the
form of numbers they haven't bothered to analyze.
Every business has a small number of critical
"measurables." For a therapist, these include the number of
clients, the average length of treatment, and the number of
new referrals per month. With just those three numbers, you
can pretty well predict the future of any clinical
practice. Obviously, the cost of rent, staffing and many
other numbers are also helpful, but those three tell you
most of what you need to know.
In other businesses, the variables will be different, but
they ALL need to be studied.
I once worked with a financial institution.
For them, the key variable was the ratio of total monthly
revenue divided by total payroll. That single number said
volumes about the over-all health of the company.
Whatever your key variables, study them! Too often managers
and CEO’s get so caught up in planning for the future and
putting out daily fires that they forget to crunch the
numbers. I believe in numbers! Study them. You can learn a
lot from a few key numbers, and make adjustments
accordingly.