April 19, 2017
As a responsible small business owner, you review your numbers at least every month, right?
I have an accountant that sends me balance sheets, which explain my expenses, my revenue, my cost of goods sold, payroll, and more. I also have membership tracking software that gives me all the valuable stats I need: member attendance records, personal training sessions, member retention, and how many t-shirts were sold.
I am happy to tell you that these stats are crap.
It’s fun and rewarding to see how many members you have and how much money you made last month. But, if you are running your business by the numbers and using the numbers to guide your decisions, you are doing your business (“members”) a disservice.
What you should be focusing on is the unmeasurables: the emotions in the gym, the level of connection you have with your clients, the vibe of the business, and your reputation. It’s the intangibles, not the measurables, that matter.
One of the popular questions at my business seminar is, “What is your member retention rate from your on-ramp program?” I am proud to say I don’t know the answer to this question.
We all have a set number of hours we can put towards working on our business. Regardless of how many hours that is, we need to prioritize where we spend that time. If you are spending hours scrutinizing over balance sheets, cash flow projections, and break-even analysis, those are hours not being spent on building relationships with your customers or training your staff to be more amazing.
I imagine if I did track retention rate, and saw it drop below a certain threshold, it would be a rallying cry to me. My staff and I would then refocus our efforts into delivering an even better service. Why not just start with delivering the best possible product in the first place? This of course requires spending time building relationships with our members – not analyzing numbers.
If you focus on the numbers, you could miss the forest through the trees. Instead, focus on the intangibles and the numbers will take care of themselves.