If I want to get that ‘deer in the headlights look’ from business owners, all I have to do is ask them to give me some specific data about their business. Sure, they may be able to give me some financials or know where to look to find them quickly (gotta love quickbooks). But can they go beneath the surface?
- Which sales data impacts their business the most?
- Which type of clients refer the most new clients?
- Which piece of data in one of their internal systems impact revenue the most?
And I haven’t event got started yet but that is all I need to see the glazed look.
Every business owner has data in all of the following areas:
- Internal Systems
But there is so much data and in many different places that it doesn’t take a lot to get data overwhelm. And when that happens, the data becomes one big blob.
Just like the picture of the iceberg above. You see the iceberg from the top of the water. You know there is something beneath the surface but you do not go searching for it and you just assume it’s underneath keeping the iceberg afloat.
So you just keep looking at the financials only. And when something doesn’t look right or something starts to crumble, you raise the flags, scramble and the ‘all hands on deck’ alarm starts ringing.
And the stress level rises dramatically. Sound familiar? Too bad there isn’t another way to go about this.
Well…there is… go below the surface.
Get a handle on that massive data blob.
If you haven’t been beneath the surface lately, chances are you are not going to like what you see. Everything is separate and there is zero cohesion. And you will probably be coming up for air often!
The goal is to have the different components of your data working together to support the structure underneath to make the iceberg strong which in turn, keeps the financials strong and healthy.
In all this data, you will find your most important data points called Key Performance Indicators or KPIs. There are many definitions for KPIs. My definition is:
A KPI is a piece of data that is so important that when it moves up or down, it has an impact on YOUR business.
With all the data that exists under the surface, how does a business owner find their KPIs?
One method I use with my clients is to map out their Revenue Workflow. It is a system I came up with that really puts clarity into so many areas. My client and I sit down and go thru a process. Here is the 30 second overview:
- I ask the question, How do you get your revenue?
- Each source has its own block
- For each block, ask the question What got you this or how did this happen?
- Keep asking until bottom level is obtained.
- This is called Reverse Engineering.
Once all the parts are done, you then map the data tools associated with each part. Now you have a starting point of what data you need to look for.
Again, this is the 30 second overview. I am putting together a video that will be on my website soon on this subject. I also did a webinar recently on this and that too will be on my website soon.
If this interests you, leave a comment or email me. I would love to help you out in this area.
Remember, knowing your data and your Revenue Workflow will save you time and money. Two things small business owners want more of these days.