Not once in more than a decade have I found a franchisee who knows all the numbers of their business. Not one. Business is all about numbers in the very end and those numbers will let you know where your business is at any point in time.
Every business has a different set of numbers they need to know and these are called your Key Performance Indicators (KPIs). Which should you know? Conversion rate, turnover/revenue, percentage of your biggest expenses such as a labour cost, number of customers, profit margin?
A good way to work out which numbers you need to know is to imagine that you are going to go and spend the next six months on some little tropical island somewhere (wouldn’t that be nice!). Every Monday morning at 9am, the manager of your business can send you through a one page document with all the numbers you need to know, all the facts you need on the previous week of business. Which numbers or facts would you need to know so that you could see if all was OK with your business, that it was tracking OK and staying profitable and moving forward? These are the numbers YOU should be tracking each and every week.
Every time I talk about this, a franchisee will always tell me they weren’t good at math at school or they don’t necessarily understand all the numbers of their business or that every time they go see their accountant, it is like the Accountant is talking in some foreign language to them. I suggest you learn. Maybe not from your accountant, but I bet someone in the head office team could help you understand them and how to work them out. Ask other franchisees what numbers they track and that will also help you.
Don’t let this stop you. The more you understand the numbers of your business, the easier it is to track and the easier it is to make sure you are going to have a record year!
