by Robert “Bertie” Nelson
Being smart with your money is boring. It’s tedious. If that’s a revelation, I’m sorry to burst your bubble. But that’s my job.
If you asked me how to be smarter with your money, I’d tell you to look at your money every day. Literally set aside time every day to open each of your accounts and look at the numbers. Yes, it’s a baby step. But knowing your financial data builds money confidence and leads to better money decisions. There’s a sea change coming to the franchise sphere, and it is embracing data, those Key Performance Indicators (KPIs) that can be tracked as our businesses, even mom and pop’s, become more digitized.
The benefit of tracking KPIs is trifold:
- You can see trends coming.
- You can track outliers.
- You can reward and encourage good business practices.
If the goal is to guide folks towards making more money, having clarity about what is and isn’t working is essential. Business owners have always been asking, “Am I ahead of the curve, or behind the curve?” Well, nowadays we can answer that question. KPIs like average unit volume, labor percentage, customer acquisition cost, and same-store sales growth… my role as a business coach is often to help folks track the right data.
Get with your financial professional to discuss what data you should track. Think about the successes, challenges, and trends that your business is facing and build a rhythm of review. Explore what the numbers are really telling you. Do they corroborate the story you are telling yourself? Reward strong performance and flag outliers early.
KPIs are an external representation of what is going on internally in your business and can be influential if leveraged appropriately. They’re a tool for dialoging with your stakeholders with intentionality.