What Gets Measured Is What Gets Done: KPI's And Measuring

Hey, welcome everyone to— these aren't even shows. I don't know why I said welcome. Thanks for watching. Um, I've been reading this book and I wanted to share some of my thoughts. It's called The Ultimate Blueprint for an Insanely Successful Business by Keith Cunningham. Um, I don't know if you— I have heard no one's— when I brought— bring this up, no one's told me otherwise. Keith Keith Cunningham is the actual rich dad that Robert Kiyosaki refers to. And if you followed any of Robert Kiyosaki's stuff, it's fine, but it's literally the same stuff. He's been saying the same thing for many decades now. And so I thought it was interesting to actually get information from the actual person who taught Robert Kiyosaki what he knows. And I'm assuming Keith didn't teach Robert everything that Keith knows. Anyways, I wanted to share with you a few thoughts I had from it, um, in conjunction with— I'm preparing to do a podcast, um, for later in the day, and they wanted to talk about key performance indicators. So I just kind of wanted to share my thoughts around that today. So here's a few things to think about. Um, what gets measured is what gets done, and anyone who doesn't want to measure doesn't want to be held accountable. I would ask yourself as an owner, where do you stand in, in that statement? Are there elements of your business that you're not measuring? And are you not measuring it because you don't really want to know the answer? You don't want to have to make the decisions that may be necessary based on the answer that you may get that you don't want. KPIs, when we think about key performance indicators, or I like to use key predictive indicators, That is a measuring device. The way it works is we measure those results, but the results tell us what activities we need to, what we need to change. So, measure results, change activities. Another thought from the book, he says, as a business owner, you get what you tolerate. Do you have members who are, I don't know, entitled? Do you have Coaches who are entitled? Do you have coaches who don't follow the rules that you want, that you feel like you put them in place because it gives a better experience to your members, helps you become more profitable? We get what we tolerate. And so if there's something that's frustrating you in your business, I encourage you to take the time to directly confront that frustration. If that's a team member who's not performing, Talk to that team member. Create a plan with them. How are they going to get to success? Do they even know what success looks like? So maybe that needs to be defined. Do you have members who, I don't know, pay late or their charges bounce, but they can still come? Do you have members who are canceling and you don't have a cancellation policy? And so, they continue to cancel and take away a spot that someone else maybe could have filled. There's lots of things, right, that are frustrations that ultimately affect our ability to grow wealth, our ability to serve our members fully. What are those? Confront them. Another thought, being big doesn't always equal success. It's interesting to me when I find a gym owner— now last year this wasn't the case because of COVID but, um, previous— if there's definitely this urge that I think a lot of gym owners feel that once their first location is profitable, or they feel like they're at least sustaining their life, even if their net income is 10%, which, you know, is okay, 20% is better, um, but it just seems like the first thing they jump to is, well, I guess I need to open up another location. Let's Let's look at doing that. That's making the gym bigger. Being bigger doesn't always equal success. For sure, in those scenarios, I'm always going to recommend, how do you maximize the current space completely before you even consider jumping to another location? I remember having a client years ago, won lots of rewards or awards. Notoriety, local celebrity type of guy. His business was always growing and, you know, Inc. 500 type of company, um, because that was what was important to him. He wanted his ego stroked. He literally grew himself into bankruptcy. Think about that. He grew himself into bankruptcy. Being big doesn't always equal success. Getting big is a result of success, but success is not a result of getting big. Another thought from the book: if you're not happy with the results you're getting, the question has to be this: what activities need to change in order to produce better results? Um, well, I mean, you're going to be the one who knows that with your gym. But, you know, if you're not making enough profit, what needs to change? Sometimes we just think like, I just need to do more of this and it'll happen. But maybe there's something that we're doing that needs to change. Or 2 other ways to look at it: what happened during that month that shouldn't have happened? We figure out how to stop it from happening again. Or What should have happened that didn't. So we wanted this to happen, but it didn't get done. Why not? Anyways, really good book. I've— I'm combining some of his stuff with, um, the way where we continue to improve our bookkeeping services. Um, but anyway, it's a good book, is pretty fast read. There are some pretty technically heavy accounting chapters in there, but Keith Cunningham has a great way to just explain things in a really low-down, like just down-to-earth type of way. I really like him. He's got some really good books. The Road Less Stupid is another book. A few more thoughts before I finish here. Some KPIs that I'm looking at that I just wanted to remind you of in case you haven't read my book or you have and you forgot. But here are some important things I think you should be measuring in your business. Average revenue per member. Chris Cooper with 2Brain is the one who introduced this concept to me. It's simple. It's your total revenue divided by your members, whatever that number is that month. The goal is to see every month that number continues to increase. Length of engagement. Another thanks to Chris Cooper. It's a— length of engagement is a lagging indicator. However, it's important that we keep seeing that number go up. So that's when did the member join with us. If they're still with us, then that number will continue to increase for them every month. If members have canceled, we keep that in the calculation as well. And so then you have an average— how long are your members on with you on an average. I also like revenue divided by team member cost. We want to see this between 25 to 44%. This is a representation of how effective are your coaches in bringing in revenue and how effective are you utilizing their expertise to bring in revenue. Also like profits divided by revenue, your net income percentage. All of these things I'm talking about, you want to see them going up each month. And then one thing that we don't talk a lot about, but I think it's important to do, is profit per class. So like, how much profit do you make in your 6 AM class, in your 7:30 AM class, in your 9 AM class? You might have some classes that aren't making a profit. And we had to make this rough decision even pre-COVID. We had to cut our noon class because we literally increased our profitability, which allowed us to stay in business longer, just by cutting the class. And we lost 2 members over it, but the income that we made off of it was, um, that we could keep increased. It's always sad to make those decisions, but you have to make the right decision financially so that you can be around for as long as you need to. Anyways, hey, those are my quick thoughts today. Um, probably a little jumbled. I apologize for that. But anyways, thanks for listening. Profit is a choice. Choose to be profitable.