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Mindset 7 – Finding the numbers

An entrepreneur listens to numbers, not words.

If we don’t know how well we are doing now how can you improve?

Entrepreneurs understand accounts and want to know the numbers behind the numbers that drive the financial performance. Think about Dragons’ Den, if the business owner doesn’t know their numbers they usually don’t last very long.

An entrepreneur is familiar with the difference between gross and net profit. They understand what Return on Investment and Woking Capital is and why they are so important.

They look to develop key performance and key predictive indicators which drive their business.

An entrepreneur bases decisions on numbers rather than feelings or mood.

When it comes to marketing they want to be able to prove a positive return on investment on every penny. They know things like:

  • The number of customers they have
  • How often they buy
  • The average order
  • The lifetime value of a customer
  • The cost of acquiring a new customer
  • How many people visit their Website
  • What percentage makes an enquiry or buy
  • Their sales won rate

 

The first number I recommend you find is how much you are worth to your business. To do this you need to know:

  • The lifetime value of a customer
  • How much time you need to invest in marketing to win a new client?

Divide one by the other and that is what you are work to your business (when you operate in a sales/marketing capacity). Now compare this to what you are worth generating working in an operational capacity generating revenue.

This mindset can give you massive leverage because you’ll be focussed on “investing” your time in sales and marketing rather than “spending” it doing work.