Two super-easy numbers to help you run your business better!

Lots of us don’t like numbers but here are two easy and super-useful ones that you shouldn’t be without!

Indicators! useful numbers for small businesses

These numbers are called indicators – and they are just that: an indication of how your business is going. So they’re not precise bookkeeper-ish type numbers. Instead they’re just rough numbers that help us see a pattern! Phew. That makes it easier. Yes?!

Two indicators

There are two indicators: a Leading Indicator and a Lagging Indicator. Sounds a bit of a mouthful but really this is simps!

The Leading Indicator

This is the closest thing you’ll get to a crystal ball! It’s a number that kinda tells you how your business is going to go! Think of it as a bit of a guide to future sales. useful numbers for small businesses

The Lagging Indicator

This is a number that tells you how your business DID! So if you have a weekly indicator (see below) this will tell you how your business DID last week.

So where do I find these ‘indicators’?

These indicators are measures you’re probably looking at a bit in your business already. So this isn’t going to be hard! We’re just going to look at them in a slightly more disciplined regular kinda way!

Your Leading Indicators!

So Leading Indicators are measures that give you an idea of how your business is going to go in the next few months. They don’t tell you exactly the size of your future sales (I wish!) but they are good predictors of how healthy your sales are going to be!

If you run an online business; website traffic and newsletter sign ups are good examples of Leading Indicators. A continued increase in traffic is likely to result in increased sales in the future.

If your business is more offline, a good Leading Indicator might be “enquiries”. An increase in the number of enquiries today is a good sign for the future, yes?!

You probably have a good gut feel for your Leading Indicators already but I’ll show you how to give this a bit more rigour below!

Your Lagging Indicators!

So lagging indicators tell you how your business DID! The most popular lagging indicator is your sales! It’s pretty easy to measure your sales revenue each week and that’s probably good enough for this! (You could also pick the number of sales)

Weekly measures

The thing about Indicators is that they really work best when you look at them over time. Checking your website traffic once doesn’t tell you much but checking it weekly for a year says a LOT.

So a very fabulous thing to do is to record your indicators every week so you can look at a whole bunch of them for patterns and themes.

This is super-easy to do. Just open a spreadsheet (I do mine in Google Docs to keep it handy). Pop the dates across the top and  your Leading and Lagging Indicators down the side. Like this:

 

Every week pop the data in your spreadsheet. Easy! Then look at how this week’s compares to prior weeks. What does it tell you? Are enquiries down? Website visitors flat? Or does it look like you’re about to have a bumper time?!

I know you can kinda do this in your head but unless you have a very fabulous memory you won’t have the data for months back! Once you start keeping your weekly indicators it’s SO interesting to look at the data over, say, the last six months to check it for patterns. It’s amazing what you can learn!

Seeing the numbers in black and white can also give us a kick up the bum when needed! I think, without even writing the numbers down, most of us have a pretty accurate gut feeling about the state of our businesses. But it’s kinda easy to ignore when it’s not in writing…..and just HOPE that things get better! YES?! useful numbers for small businesses

Can I have more than one Leading Indicator?

You can pick as many Leading and Lagging Indicators to measure as you want. I find though, that if I pick too many, my brain just gets lost in a sea of numbers. My tip is to pick one of two that you find super-useful and to leave it at that!

What if I pick the wrong Leading Indicator

It’s usually trickier to work out what Leading Indicator to use than it is to work out the Lagging one (sales!). But don’t worry about picking the ‘wrong one’! Just start with whatever feels right to you. After you’ve recorded it for a few weeks you’ll know whether you’ve picked one which makes sense. And if it doesn’t, that’s FINE! Just pick a different measure and try that! This is just meant to be helpful for YOU so if it feels useful to you, you’ve got it right! Hurrah!

♡ YOU! ♡

Fancy giving this a try?! It’s super- easy and really VERY useful once you’ve got a few weeks of recording under your belt!

PS If you are serious about making a Healthy Income from your solo, boutique, homebased, homemade or other small business you might like ourHealthy Income Program! We start it again on 2 February! Super soon! You can read about it HERE!♥

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