Continuous Financial Improvement

When it comes to business, numbers are not the enemy. Let’s see if we can make them your friends.

Why numbers have taken a bad rap all these years, I don’t know. Maybe it’s the institutionalization of education that occurred during the industrial revolution. It is difficult to undo years of hatred of numbers, but I’m going to try.

FIRST STEP:  ACCEPTANCE
First of all, if you are in business, you have to accept that numbers are important. So ACCEPTANCE is the first stage. All of these numbers affect you:

• Number of customers in the door per day
• Number of SKUs you carry
• Number in your checking account

Then there are these numbers:

• How much you charge
• How many you sold
• How much it cost you

And operating costs:

• How much is your rent?
• How much do you pay your employees?
• How much do you take home?

What happens if you ignore these numbers? They don’t care. They keep adding up and up until they haunt your dreams. Why? Because they are unknown. And you are making decisions that are not based on facts, facts called numbers.

SECOND STEP:  SENSITIVITY TRAINING
The only way this is going to improve is with training. For your sensitivity training, you must learn to look numbers straight in the face and not run for the hills. So we must stop the procrastinating, looking away, and burying our head in the sand. Look towards numbers. You should realize by now that they don’t disappear just because you ignore them.

To overcome years of hatred, we must start out slowly–by tracking only one number. Here is an easy way to begin. Buy a whiteboard or blackboard, depending on your preference, and hang it at the back door where you leave to go to your car.

First, start with the number of customers you saw today. Write that number on the board before you leave. Do that for a week, a month.

Soon you realize that the numbers don’t hurt you. They are communicating with you. That is all numbers do; they communicate with you. They communicated how many customers you had in your store on a given day. (If you don’t have a store, pick another number that is meaningful to you.)

So now it’s been a month, and you are ready for more. Go back to your whiteboard. I hope you bought a big one, because now we are going to list all the days of the week: S, M, T, W, TH, F, S. Under each one we are going to list the daily tally. If you are up to it, you can total them up for the week. If you’re not ready, don’t push it. It’s good to know your limits.

If you noticed, in the beginning I said that numbers can be your friend. What do friends do? True friends communicate with you; they tell the good and the bad. Numbers do the same. They communicate an aspect of your business to you. If you set a goal, they can tell whether the result is good or bad based on your standard.

THIRD STEP:  SET A GOAL
Now I want you to draw another box under each day of the week. In it, write the number of customers you hope to come in the door that day with the number that actually came in the door that day.

Now I hear you thinking, “Aha! Numbers are the enemy. They are not telling me what I want to hear.” To which I answer, remember the saying, “Don’t shoot the messenger.” That’s all numbers are, they are the messengers of your business.

EMBRACE THE NUMBERS
The fourth and final stage is “EMBRACE the numbers”. Just as you hug a friend when they are honest with you and tell you something that is difficult to hear, so it goes with your numbers.  Embrace them; make them part of your daily work life. Not just superficially, but really understand what the numbers of your business are communicating to you. They are not there to hurt you. They are there to help you make good decisions about your business. Just think—now you have a new friend, and her name is “NUMBERS”.