Running a business (numbers)

If a person does not know the numbers in their business, they do not know their business.

Most consultants have never met a successful business person, who does not know the numbers of their business.

Numbers do not lie, which is often why people do not want to look at them because they will say the truth which can be bad news.

Liars, cheats and failures will also not want to discuss their numbers in a business as they also reveal the truth of what they are.

Key performance indicators

Key performance indicators can be very revealing.

Eg.

How many sales a salesperson got that month.

How many sales a salesperson per hour they worker that month.

The average length of time a customer will stay per account manager.

The gross profit of a product.

It is possible to manage very large companies, by just seeing who is doing well and who is doing badly from the numbers.  Just like and see which football team is good and which is bad, from their goal scores and matches.

Many people do not like this as it shows their failure or mediocrity.

Question everything to find out more

When find out a number, then ask questions.

Then research the answer to that question using numbers.

Then will find out new revealing numbers.

Eg.  How many purchased items returned to company. Then may want to ask how many  returns by the person that made it, product line etc.

Variance reporting

Variance analysis is a useful way to find things out.

Normally 20% of people are great, 60% okay and 20% of rubbish.  The bottom 20% do more harm than good and the organisation would be better off without them.

The top 20% show how it should be done and what is possible.
So look how well the top 20% are doing. Then everyone else is either less good, lying, or just being lazy doing the least they can get away with.

Can go further and look at the top 5%, 1% etc.

The big thing though is comparing the different numbers from different people, units, divisions, etc.

Thesw variants can be used for customers, suppliers, products, people etc.

Also look of variations over time, location, size etc to see if a change over time somewhere shows something has gone wrong.