Business is just a game of numbers

Business is a numbers game, but do you know what business numbers to meausure?

Business success is measured by business numbers, that’s all, pure and simple.

Even the biggest companies in the world follow this and they publish their business numbers regularly.

But if you look at their business numbers, they don’t talk about their P&L or their balance sheet first.

THEY START WITH THE BASICS.

Let me give you an example from a couple of businesses that you’ve probably heard of and how they publish their business numbers.

M&S plc lead their 2017 Annual Report by saying they are one of the UK’s leading retailers, with 1,433 stores worldwide. They go on to state that they had 32million customers, split 38% male and 62% female. Their website attracts 8.3 million visitors per month and 40% of their customers shop for clothing, home goods and food. 52% of their online orders are made by mobile and 40% of food customers by their food ‘for tonight’

M&S plc state these facts because these are the critical factors that lead to their success.

They need physical stores in a close proximity to their customer base, back with an online presence that serves a growing sector of these customers. They know who their customers are, intimately, so they can tailor their offerings to those customers.

By knowing these business numbers, their Key Predictive Indicators, M&S plc are able to generate sales of £10.6bn and profit (before adjustments) of £613.8m.

Facebook Inc lead by telling the world that they have 18,770 employees (at 31 March 2017) and 1.28 billion daily active users with 85.8% of the their daily active users outside of the US and Canada. They also have 1.2 billion daily WhatsApp users, 1.2 billion daily Messenger users and 700 million Instagram users complete their Community statistics.

To find the financial statistics in their Annual Report, you have to go to page 31.

That’s 30 pages before you see their top line revenue of $27.6bn and 10,19bn of profit.

Facebook lead by telling you about their employees because they are who come up with the ideas and codify them into apps. The users of these apps are what attracts advertisers who then bring in revenue. They know which business numbers drive sales and revenue.

Always, always start with the basics, then revenue will follow.

Business is just a numbers game, but it needs to be played right and to know if you are winning then you need to keep the score.

The point is, what score sheet do you measure first?

It’s not revenue.

Nor is it profit.

Your scorecard needs to start with the basics, your key sales drivers.

Sales drivers are the critical business numbers to measure first as without sales, you have no business.

Learn the secrets of success from the big boys and study how they manage their numbers. Most of the top companies in the world measure their sales drivers first, because they know that this leads to revenue, which when managed correctly will lead to profit.

If you have regular management reports that start with revenue, then you’re getting the wrong information.

You need a One Page Plan designed to measure and track the 3 specific drivers of:

  • Sales
  • Costs
  • Success

Try it in your business and you’ll soon see that uncommon results start with measuring uncommon statistics. To outperform your targets, you’ll need to understand what drives your targets.

Work backwards before you move forwards.

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