The Top 5 Numbers YOU SHOULD BE Tracking For The ULTIMATE BUSINESS SUCCESS

Foreign. Welcome to the Success School Podcast. Today I'm going to be talking to you guys about the top five numbers to track for overall business success. Along the way, guys, I'm going to talk about some lessons that I learned from my first ever business coach, which are quite funny and quite hilarious to reflect back on. Also, also, I'm gonna be talking through taking ownership of a new business and what that looks like for me. So probably a couple of months ago, I was putting myself in the right places. I was actually brokering a deal for something else because, you know, you need a hustle to get where you want in life. But an opportunity came up in my industry to take ownership of a portion of another business, another gym, essentially, to manage and grow it. So I kind of do this shit in my sleep. So I thought it would be pretty simple. Essentially plug and play all my systems and process and all the things I've learned over the last 15 years into a new gym, which is great. So that deal went through and yeah, I took a good percentage ownership of another gym. I think it's quite an exciting challenge that I have coming up. So, yeah, in literally like four months, I've gone from owning one thing to three. So 300 times increasing business in a couple of months, which is great. But why I'm telling you the story is I was putting myself in the right places for these opportunities to happen. And at some point, if you're listening to this, opportunities may be presenting themselves to you or they may not be, but if they're not, it doesn't mean they won't. Because literally from day to day, your life can change with one decision, one action, one business opportunity. Things can change so quickly. So literally in the first meeting I had with the other owner, so the other part owner of this new gym, I asked to see the numbers and the KPIs of the business in detail, as any good coach, consultant or owner would want to see. And he was able to provide me with strong KPIs. We had a P and L. We had literally all the data that I could look through and analyze the business from a whole. So as you can imagine, stepping into a brand new business and knowing exactly what the KPIs are or the numbers or metrics is incredibly helpful because I can pick out what the issues are that we're going to work on in our first quarter or 90 day plan that I run through with this new gym. So numbers are very important in business and that's the whole point of this episode of this podcast. I'm going to give you the top five metrics that we're going to cover today. I'm going to go into a little bit of detail and I'm going to make sure that you are tracking these top five metrics in your business. The reason this is important guys is I couldn't make an educated decision about any of my companies without knowing the metrics or what I'm going for. You have to be tracking metrics if you want to be a serious entrepreneur. So how this is going to work if you're not tracking metrics or KPIs, I would suggest start tracking them. If you are, just look at the ones you are tracking. I think these five are great. You can add more, but I think these five are the most important. Especially if you're under that seven figure mark or around that seven figure mark. These are super important. The way I track metrics is literally super old school. I use a Google sheet. With the Google sheet I have a column for the month or the week. So if you're doing weekly, weekly. If you're doing monthly, monthly. And then each row is what the metric is. So the first metric I'm always tracking is revenue. So that's revenue or total cash generated by the business in that period. Okay, so usually you want to verify this with whatever accounting software you're using and bank account and kind of check out if there's any discrepancies in there there. But usually I like to go off the bank account as well. You know, sometimes you can. Other stuff can be running through the business account that isn't Overall revenue generated by the business can happen, but you just want to verify these numbers. This is a really good indication of total action taken by the business. Is the revenue metric bigger revenue generally is more action taken. Okay. That's what I kind of look at this number as the next one is. You want to total your expenses for that week or month or whatever period you're tracking for. Usually with expenses, our dividend these up into three categories. So I've got reoccurring expenses, wages and salaries and super and all that stuff. And then I have one time expenses. So generally they're in three categories. At the end of the month I'll usually work out totals for each of them. So I'll know exactly what my reoccurring expenses are. I'll know exactly what we spent on wages and I'll know exactly what the one time expenses are. I do this manually. I do this every month for all the companies that I work in just because I want to make sure I'm across all the numbers and metrics. Okay. I know you can get a lot of this stuff on a spreadsheet in Xero or whatever accounting software you're using, but I like to go through it line by line and just to make sure I'm all over it with this. So reoccurring expenses is anything like software subscriptions? Literally, software subscriptions, rent, stuff like that. Reoccurring stuff that comes up every month you can't really get out of most of the time wages and salaries, pretty self explanatory there. And then one time expenses say you know, you've got an SEO consultant to help you with some fco or you got a Facebook ads consultant. It's just a one time fee. You'd pop that in that category. Or one time fee is usually pretty variable. But from the reoccurring expenses and the wages, you should be able to see what your consistent expense number will be from there after that. The third metric we're tracking is profit and that is how much is left over after all is said and done. So that will be expenses. So revenue minus expenses will equal your profit generally. So let's say you made 40 grand for the month and then your expenses were 30, your profit was 10. Okay? So that 10k would give you a 25% profit margin, which depending on the industry is pretty good. This is a true sign of business health. Is your profit what you want to think about with the profit margin? This is where a lot of small business owners go wrong when they're tracking it is they include or exclude their wages. So you want to be very clear when you're calculating this profit that if you are or aren't taking away from it, that you need to take that into consideration when calculating a profit margin. Generally when I'm running a business, I work out the profit margin excluding the wage I take from the business or the money I withdraw from the business. If I am at that point. I think that's a more of a true indication for me of the actual profit margin of the business for various companies or various other coaching programs I've ever worked with. Sometimes they call this like the personal. The personal stuff you run through the business, they call that a net owner benefit. So let's say you run a car through the business, you run all your subscriptions, maybe have a Netflix account, maybe you know, you have a phone through the business and that benefits you personally. That will go under net owner benefit. So you just want to Be aware when calculating your profit margin, maybe you want to do one that is with your net owner benefit or not with your net owner benefit. And then you can calculate truly what the business is profiting from. There pretty common to see things like people making 80,000amonth and then they're spending 78,000amonth, excluding their wage, which is not good. A lot of people live in this place where they're making massive profits and they're spending massively every month. Generally, you're not gonna go very far. This is where a lot of the gym industry is actually. They have decent revenue, but they don't have great profit because generally it's a race to the bottom. In the fitness industry, everyone's trying to charge less, which is not great for the gym industry. Then you get a bass or a GST bill or something like that. They don't manage their cash, all of a sudden, they're sunk. Not a great thing. But you want to be tracking this profit margin very carefully. So the fourth metric I would like you to track is new leads into the business. What I would count as a lead is a name, email and phone number. That would be a lead for me. Name and email. Maybe if you're adding them to an email list, but you've got to get all of their details for me. So name, email, phone number, I count as a lead in the business. This is a true sign of your marketing efforts. So if leads are up or down, generally that's good or bad marketing and you need to look at this number consistently over time. Last and the fifth metric that I would like you to track is new sales. And this measures the effectiveness of your sales team, landing pages and chat team. Very important when growing a business. In all of my podcasts I've been talking, or not all of them, but a lot of them. I've been talking about the importance of sales. I think this and profit are probably the two most important metrics here. Profit and new sales. So how you can work this out from how many leads do you need to make new sales? So let's hypothetically say in my gym, every three leads we make one sale. And then let's say we need 10 sales a month to hit our revenue goals for the year. That means we would need 30 leads a month. So you can use these statistics or, or KPIs to measure and estimate what you're going to need from a business leads sales point of view for the rest of the year. So if you can imagine, if you've got some histor Data looking back for the last two years, every month, and you have revenue, you have profit, you have new sales, you have new leads, you have expenses, you have everything listed out in a table for the last 24 months. You're going to be able to see some trends in your business. And then you can look back and say, look, let's say you had a good month six months ago. You can look back and go and see what was your marketing at that time? What were you doing for sales? Did something change? What was your key messaging? Did you make any changes to your website which ended up not going well for the business? But it's really just getting some data on this. Where this goes wrong is where people are very emotional about their business and they don't look at the data or the, the statistics. So I just want to go into a little bit of a story on this and this is where this is gone wrong for me. So I think really good business practice is based on numbers, not feelings. I work with a lot of entrepreneurs and a lot of entrepreneurs use their feelings to guide their business decisions, which is bad. And I have done that before. So I'm not one to sit on my highest horse and say, don't be emotional about your business, because I have been an emotional little bitch, I would say about my business. So my first ever business coach asked me how many leads I was getting and I was complaining that I had a leads problem, AKA not having enough leads to make enough sales in my business. I told him I was getting about 30 to 40 leads per month, which is actually quite a lot. When I actually checked and started tracking it, I was getting close to 60 to 80 leads a month. And I didn't even know it because I wasn't tracking, I wasn't using software, I was not getting, I was not using my KPIs. Literally, I wasn't doing anything. This was probably like seven, eight years ago. Now. I actually calculated that I'd made about five sales from the 60 to 80 leads. So if I was telling you on this podcast right Now, I got 60 to 80 leads and I made five sales. Do I have a leads problem or a sales problem? Obviously I have a sales problem. Our standard for sales, and I say this for everyone that does sales consultations, which we do, should be around 80% or 8 out of 10 should sell. So my sales conversion percentage was, you know, let's say less than 10%, which would indicate to me that I had a massive sales issue here. I went to him saying that I had a leads problem. He told me to look into the numbers and then I actually worked out that I have a sales problem. The big problem here was I actually had no idea what the numbers were. It was a feeling rather than actually knowing until I did some digging. A lot of people have a resistance to knowing their numbers or looking to KPIs or doing their KPIs. Because if you really ask yourself why you don't want to look at your KPIs, it's probably because you're hiding from the truth. And the truth here is maybe you are doing worse than you think you are, maybe you're doing better than you think you are, but you're hiding from the truth either way. So generally my team does Most of our KPIs, I do the financial ones in terms of revenue and profit, but my team will do the rest of the KPIs. So sales, close rates, conversions, et cetera, all that type of stuff. Just so literally. I can't lie to myself either on this. So I'm getting a report every Monday and it's telling me we got X leads, we got exhales. Here was our close percentage. Here's what was going right, here's what was going wrong. And I cannot hide from the truth anymore. Every month, on the 1st of every month, I go back for the previous month. I do our profit, I do our expenses, I do a P and L statement, all the other statistics that I need to look at for the previous month to have a great business. So my final action items for you today is I want you to set up a spreadsheet. I want you to track these five things and look for trends at least every month. Revenue, expenses, profit, new leads, new sales. So next week on the podcast I actually do have something exciting coming up on the podcast. We have grand slam offers. So I'm going to be talking to you about how to make more offers, how to make more sales, and to make it easier to sell. Don't forget guys, if you got anything from this episode, subscribe, Follow Share with someone who would find this valuable, AKA word of mouth is essential for the growth of this podcast. And don't forget to leave us a five star star review. Thanks for checking out this episode.