Episode 337: Numbers You Need To Know In Your Business

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Hey, Jumpers! Today's topic is all about numbers and their importance in your business. It may not be the most exciting subject, but hear me out, because it is definitely one of the most critical aspects of running a successful business. Many business owners tend to overlook the significance of numbers in their operations, leading to financial mismanagement and potential losses. In this podcast episode, we'll dive into the numbers you need to know in your business and ensure you're getting them right. Whether you're a small business owner or a CEO of a large corporation, understanding and utilizing the right numbers can help you make better decisions, identify growth opportunities, and increase your bottom line.

Topics Discussed and Key Points

  • Why tracking numbers is important
  • Numbers make us better leaders when making decisions
  • Mastermind
  • Six numbers to track for your business
  • Chinese wall
  • The importance of tracking website analytics
  • Knowing the profit margin for all services, charging by time, and using numbers to make decisions.

Timestamps

[00:32] Introducing today’s show
[01:51] Why we need to know numbers
[03:44] Tracking revenue
[03:58] Tracking expenses
[05:17] Tracking net income or loss
[06:24] Tracking  gross margin
[06:35] Tracking  cash flow
[06:43] A break-even point
[08:27] The importance of Google Analytics
[08:51] Why do you track your user number
[09:24] Sessions
[09:41] Bounce rate
[10:18] Average session duration
[10:53] The conversion  rate
[11:17] Employee retention rate, churn rate, and client retention rate
[12:36] Check out the Mastermind

Notable Quotes

[00:01:06] ‘If you want to grow your business, you need to know your numbers. You need to know them at a minimum every quarter. I encourage you every month.” [00:01:17]
[00:02:11] “Our team needs numbers to hit or to strive for, to know. All right. This is the litmus test. We’re doing good or we’re not doing good.” [00:02:19]
[00:03:14] “Numbers matter. Your business numbers matter. The revenue numbers matter. Your client total. All of that matters. But it can be a real pain to try to figure out which ones you should be tracking.” [00:03:25]
[00:03:58] “If you guys are using a debit card right now to pay for anything in your business, you’re not leveraging what you could be. I highly recommend applying for a credit card, a business credit card, and get your business credit going and you can earn points that way.” [00:04:16]
[00:07:11] “By tracking those numbers and analyzing them regularly, you can gain valuable insights into your performance and then be able to make informed decisions on what you should do.” [00:07:21]
[00:08:02] “While you might not love numbers as a business owner, as a responsible business owner, you need to know some of these business numbers.” [00:08:11]
[00:08:33] “Your Google Analytics is the epitome of if you had a storefront, you want to know how many people come in your door a day, right? You want to know what the average sale is every day. You want to know how many people walk in and walk out without buying anything.” [00:08:50]
[00:09:28] “By tracking the number of sessions, a business can see how often users are visiting the website and identify opportunities to engage in or train them.” [00:09:36]
[00:09:53] “A high bounce rate isn’t necessarily a bad indication. Why? Because most of you guys have an online scheduling system that is hosted on a third-party website.” [00:10:04]
[00:10:30] “There are so many statistics that the more people read on your website and watch, the more likely they are to buy your product or service because they are invested.” [00:10:41]
[00:13:03] “Failure is the greatest lesson we can have. And so you want to fail forward. You want to fail fast. You want to learn everything from that failure so that you can tweak and adjust. It’s testing, you can tweak and adjust and keep going.” [00:13:16]
[00:14:51] “If your 20 minutes is $20, then your 30 minutes should be $30. But most of the time your 20 minutes is $20 and your 30 minutes is like $24. That doesn’t make sense. It doesn’t make sense, nor does it make sense that a lot of people who charge by time don’t charge by time.” [00:15:10]

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Transcript

Welcome everybody to another episode of Bella in your business. My name is Bella Vasta. And today we’re going to talk about something that a lot of you do not like talking about. It is the number one topic that hinders a lot of your decisions. It’s the number one thing that if you paid more attention to it and used it to make more decisions, you would make better decisions. Do you know what it is? It’s numbers. Yep, the numbers in your company. Today, we’re gonna talk all about the numbers that you need to know in your business, I’m gonna give you a good overview of it so that you can kind of just start thinking about it. And tracking it tracking is key. If you are if you want to grow your business, you need to know your numbers, you need to know them. At the minimum every quarter, I encourage you on a monthly basis, you need to have these things called key performance indicators, KPIs so that you can kind of set up a spreadsheet and whatever, whatever is the indication of good performance, those are the numbers you should be tracking. And it might be different for everyone, depending on your goals. But we’re gonna talk all about this today, we’re gonna get down and dirty. I’m gonna give you a good overview, some good food for thought if you will. But first, if you love this podcast, please feel free to share it with your friends and tag us. And also don’t forget to subscribe, and I would love it if you would leave a review.
Alright, so getting into it. Why do we need to know numbers, it takes the feeling out of it. And it helps us be better leaders. So we can make decisions based on numbers and not our feelings. As we delegate and we need to bring people on our team, we need to define their success not based on our gut, but based on the numbers. Our team needs numbers to hit to strive to know, alright, this is the litmus test, we’re doing good or we’re not doing good. And it’s just in time for taxes. Taxes were due this week, and personal taxes, and corporate taxes were due last month. But you know, it’s just everything’s numbers. It’s even-numbered in the mastermind this month. We’re talking deeply about it. We’re giving out all kinds of freebies it’s a champ churn rate freebie for regular dog-walking clients. And we’re going deep on it. We’re not going to go too deep today, because this is just like me too many. And it’s kind of hard to have that intimate conversation. But if you’re looking to have that intimate conversation, the mastermind is someplace you might want to check out. That’s jumpconsulting.net/mastermind. Or if you’re still unsure, shoot me an email bella@jumpconsulting.net. And we can get together and have a chat on the phone. All right, so pardon me. So what I wish someone had told me a long, long time ago, numbers matter. Your Business numbers matter, the revenue numbers matter your client total, all of that matters. But it can be a real pain to try to figure out which ones you should be tracking. Because frankly, not all of us went to business school. Here are some quick tips for everyone who is learning as they’re going to make mistake steaks and pick us up, pick ourselves back up again, as the owner of a dog walker in your pet sitting business, you need to track these six numbers.
So the first one is revenue. So that’s how much money the business earns, from your services, and expenses. That’s the total money amount of money that goes out. And I would, really, really encourage you if you guys are using a debit card right now, to pay for anything in your business. You’re not leveraging what you could be, I highly recommend applying for a credit card, a business credit card, to get your business credit going. And you can earn points that way and those points you can turn in to get an airline ticket or Disney tickets for the family or whatever it might be. But I want to encourage you to be strategic about it. I have got one of the best business cards ever. I make double at least double back on all of the annual fees. It’s it’s amazing. It’s my favorite card ever. If you want to know about that, let me know. And I will I’ll send you a link it’s bella@jumpconsulting.net Just email me but I’m definitely all of your expenses should be that way and then you also need what they call a Chinese wall like it means that nothing is intertwined. You charge everything on this one card ARD and you pay everything from the business bank account, it actually will make things a heck of a lot easier when you’re trying to reconcile your expenses or your bookkeeper is because it just makes it streamline and flow. I know most of you guys know this, but I know a lot of you aren’t doing it. So I want to encourage you.
The third, third thing is net income or loss. So this is the difference between the business’s revenue and expenses. And if the business earns more than it spends, it’s a net income, if they spend more than they have, it’s a loss. Now I know some of you guys try to write off everything and the kitchen sink. And that is a strategy. It’s personally not a strategy I feel comfortable with. And the reason is, because one day, you might want to get a house or a car or a loan or something for something. And they want to see that you are, you know, for the past two or three years making good money consistently. And if you’re showing that your business is making no money, that’s not going to help, it’s also not going to help if God forbid, in two years from now, you have some sort of a life change, and you need to sell your company, and you’re showing that your company has a loss or very little profit. That’s not good either. So from a strategic and investment standpoint, I encourage you to consider reconsider your strategy. If you’re one of those that try to make it look like your business isn’t making money because it could severely backfire on you. Um, number four is the gross margin. That’s the profit of the business the business makes on the product or services by subtracting the cost of goods sold from the revenue. In other words, the services, and cashflow, it’s the amount of net cash the business receives and spends during a period. And a break-even point, this is the point at which the business revenue equals the expenses and begins to make a profit. So it costs x amount of dollars a year to keep your business open, like and so these are all good numbers to know how to do them. That’s a whole nother conversation. A book, a good bookkeeper can also really help you with that. So I encourage you to check that out. And take a look at that stuff there. If you have QuickBooks, that can also help a lot. So by tracking those numbers and analyzing them regularly, you can gain valuable insights into your performance and then be able to make informed decisions on what you should do. It’s really that simple. But I know that everybody wants to stick their head in the sand, and pretend it’s not out there and just be like, Oh, la la la la la la. I used to do that. When I first started my first couple years of business, I remember I had like a $1,500 tax bill. And I remember almost painting at $1,500. Because it was a lot of money to me when it first started. And I was just flabbergasted. And I was like I can’t, I can’t do this again, like I can’t be in this position again. And so I learned what I needed to know for numbers, you guys, if you follow me, you know, even like I have this 30 3040 method.
If you follow Profit First, it’s very similar to that. And so while you might not love numbers, as a business owner, as a responsible business owner, you need to know some of these business numbers. Now I’m gonna give you some more numbers. These are for your website. And this is also I would argue, pretty important. And we’re talking a lot about this in the mastermind. And people are sharing Analytics, which is also really cool to see, and how you compare and stuff. But when we talk about Google Analytics, this is something else I wanted to talk about. For the numbers, you need to know in your business. Because your Google Analytics is the epitome of if you had a storefront, you want to know how many people come in your door a day, right? You want to know what the average sale is, every day, you want to know how many people walk in and walk out without buying anything. So your users, you need to know the user number on your Google Analytics. It’s the total number of unique visitors to the website. By tracking the number of users you can see whether your traffic is increasing or decreasing. This is helpful when you’re running Google AdWords, you’re doing better marketing with Bella, or you’re doing Facebook ads, or Instagram ads, that kind of thing, or posting blogs. Or maybe you have a special promotion going on that you’re trying to get more eyeballs on your website. All of that stuff is interesting to track.
And so the next one is sessions is the total number of visits to a website. So by tracking the number of sessions, a business can see how often users are visiting the website and identify opportunities to engage and retrain them. So the user walks through the door. But how many times do they come through the door in a session? And then the bounce rate is they walk in, they don’t buy anything and they walk out. So bounce rate is the percentage of users who leave the website after viewing only one page. Now for us, this is gonna be a little interesting because a high bounce rate isn’t necessarily a bad indication why? Because most of you guys have online scheduling so stuff is hosted on a third-party website. So people might come to my petsitting company.com, click book now click existing client, and then now they’re off your website in like 10 seconds. But where are they getting off on your website. So that’s something that’s like really important to see. And then average session duration, this is also really cool too. And that’s why in like blogs, we always say too, you know, link to other things. And like, you want to kind of make a tangled web and keep them in there especially, there are so many statistics that the more people read on your website and watch, the more likely they are to buy your product or service. Because they are, they’re invested, they’re interested, they want to soak up as much knowledge as possible about you, it needs to be about you and not about the industry, it needs to be unique, you know so that average session duration is cool.
And then the conversion rate. So you might think that maybe for us a conversion rate would be if they get into, you know, time to pet or precise pet care or lease time or whatever it is that you use. However, it is a little hard to find out about that conversion because your website isn’t collecting the sale. But those are the things that I want you to think about with Google Analytics. Now employee retention rate. And this also goes for client retention rate churn rate it was we call it churn rate is the rate or the length that people stay with you. And you can track all of this stuff, we actually gave her a free handout in the mastermind last week, on how to track your churn rate. And you can give it to your office manager or you can do it yourself, whatever. But it’s like a monthly thing you can track. The reason why this is important is that if you know that an employee stays with you only for seven and a half months, or you know that and employ a dog-walking client who only stays with you for 16 and a half weeks, then you know where you need to start building out your client or employee retention program, you can start predicting when people start dropping off for whatever reason, and you can reengage with them, these things are vitally important to the success of your business. And most people don’t even think about these things, let alone actually use this data and help, like make a difference. Now, you might be inspired by this podcast. And you might be like, Okay, great. I want to start using this data. How do I do that? Well, um, I don’t have enough time on this podcast to do that. And it’s really hard to just give you a general answer because everyone’s so different. And that’s where the conversations and the mind hive of the mastermind come in. That’s where we can get down to the nitty-gritty. And that is where we are. It’s really neat. But I also want to encourage you that if you do go ahead and go do this yourself, you’re probably going to fail the first couple of times, because that’s the whole thing. And I would fail forward, like think about like, Okay, I’m gonna try something. And I’m gonna learn from this, because I know the first thing that I do isn’t going to magically work, right? Like, nothing happens that way. Failure is the greatest lesson we can have. And so you want to fail forward, you want to fail fast, you want to learn everything from that failure so that you can tweak and adjust its testing, you can tweak and adjust and keep going.
So you need the accountability, the motivation and the community around you to help you keep going on that because it gets pretty depressing, especially if you’re doing it by yourself. Or what happens is because we procrastinate, what we don’t want to do, am I right? Can I get an amen out there? We procrastinate. Well, if we don’t want to do so then what happens is we have the intent to do it. But then we don’t do it. And again, I’m not trying to just like pitch you But truly, I mean, guys, everything that I’ve created for this industry is the solution to a problem. So everything I’m saying right now, if you feel like you’re alone in your business, you feel like you don’t have the accountability, you feel like you need a little bit of guidance or fire or someone just called me. I’m the gas. I’m like, I’m the spark. If you need that in your life, you want to check out the mastermind you do. It’s the most positive encouraging community where you can get an accountability partner, you can get people rallying around you, you can get outside your own head, you can get encouraged, and you can encourage others as well, which is also really important. So figure all that out. Use those numbers. I want you to know what your profit margin is for all of your services. I cannot stress this enough every single time I’m around a business owner, you know, like even today just had a conversation. They’re like, Well, I was like, Well, what’s your project? Your profit margin for the 20 minutes because he has a 20-minute 30-minute 45 and a 60. And they know a lot of you guys out there do that? Because that’s how like the industry started but it’s such archaic thinking like why tell me why you have that. Tell me why. And if your 20 Minutes is $20 then your 30 minutes should be $30 but most of the time your 20 Minutes is $20 and your 30 Minutes is like $24. Like, that doesn’t make sense. It doesn’t make sense. Nor does it make sense that a lot of people who charge by time don’t charge by time because if they are 1-234-567-8910 minutes over, they’re never charging extra for that time. Therefore, they’re not charging by time. That’s a whole nother can of worms. Know your numbers, guys know them, use them to make decisions, and track them. I can’t tell you how long I had a KPI chart that we used as tracking for a whole lot of things in my company. We also actually gave that for free last year in the mastermind. And this KPI chart, you know, it’s just to gather numbers. And so that when we finally want to come in and analyze it, and we, you know, we’re like, we want to, we want to make this one pop a little bit more, let’s see what the trends are. And what can we learn from these numbers? Because we’ve been collecting them now we can do that.
So it’s pretty powerful. I know it’s not the sexiest topic. I know, it’s not the most exciting topic. But it can take it can help take away some of your anxiety. I really can. Because now you’re not just relying on your gut, and you’re not nervous and you’re not oh my god, am I making the right decision? I don’t know what to do. Now it’s a numbers game. So I encourage you to know the numbers of your business. You guys this has been another episode of Bella in your business. Thank you so much for being here with me today. Again, don’t forget to like, subscribe, share, and remember that when life gets you down, always keep jumping by now

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