WHAT NUMBERS SHOULD YOU BE LOOKING AT IN YOUR BUSINESS?

"You have been blessed with a mind that can direct your actions in any way that you choose." -Ramon Luis

During the first Super Bowl that Tom Brady won (with the Patriots), these were some of the companies who advertised (hat tip to Jon Erlichman of Bloomberg):

AOL
Blockbuster
Radio Shack
Circuit City
CompUSA
Sears
HotJobs
Yahoo
VoiceStream Wireless
Gateway Computers

The year was 2002, and life looked a little different, eh? BUSINESS looked different. And this past year ... well, we've all had to adjust to some things.

This is going to be an interesting few years... and it pays to have someone in your corner who is attending to those things that you cannot.

Often, we're stuck looking historically instead of real-time, because too many business owners don't have a system in place for getting those numbers to us quickly. But when they do, we can very quickly know how to help.

So today, I'm laying aside tax issues for a moment to help identify for you some numbers that don't necessarily show up on balance sheets -- and why they're perhaps even more important than what you see on a P/L (Profit & Loss) statement ...

It's easy to get lazy when a business can pick the low-hanging fruit available in an easy marketplace.

But that's not always the case, is it?

Inflation sucks, markets shrink, funding dries up, prospects aren't as easily found, or profitability margins decrease. So what do you do? Many business owners don't know how to tweak their marketing and sales systems, so they can track the numbers at each step in the sales process and grow in new directions.

I have seen among our real estate investors those businesses that have weekly sales meetings, track their numbers, and hold team members accountable, are successful ... while those that guess and "assume" are usually out of business. It's just a matter of time.

The key is knowing the numbers -- what is the average expected result, and how you are measuring up against that result for each step in the process.

But many people don't want to track the numbers, because they might have to admit that they aren't doing their job and letting their teammates down. Others simply do not have the systems or do not understand how to track those numbers or understand the benchmarks of the average business, the good business -- and the GREAT business.

Many self-employed business owners just feel what they are doing is "working just fine" without having tested it or tracking where they are at. Sadly, this reflects a naivete that will eventually bite you in the rear end.

Unless you have completed valid measurements and received statistically reliable results, you don't have any idea whether you are improving or going backward.

Especially in a crazy real estate market, it's important to get ahead of the curve and not rely on lazy systems for your business.

So, here is the cold, hard truth: if you don't know how to test scientifically -- or if you do know but you think it's not necessary -- your business is on the slow road toward oblivion.

Here are the sorts of things you should be watching...

If you want to develop business mastery, it starts with expertise in direct marketing and sales. And that means establishing the ability to measure the following factors :

• Statistically valid testing at each stage of the sales process
• Structuring price, term, refund, and premium tests for profit -- and what works
• Determining the true lifetime value of every new customer or tenant
• Calculating "allowable acquisition costs" (what you can spend to get a customer/tenant)
• Measuring responsiveness by advertising source
• Identifying the "doubling date" or "half-life" of a new offer or customer
• When is the right time to purge unproductive prospects and staff
• How do you identify opportunities for multiple streams of revenue within your business (the numbers should tell you)

If you can't measure these areas in your business -- or if your key people cannot -- consider your business to be in trouble.

You don’t know what you don’t know—but your tax pro has seen the underbelly of real estate and can guide you moving ahead. Plus this weekly blog is dedicated to your wealth.

Call your tax pro NOW. Every day you are missing profitable opportunities

BE THE ROAR not the echo®

Warmly, Janet