BUSINESS Tools For Managing Your Business: Tracking And Measuring Performance Understanding the Budget Section Development, construction and use of budgets will be covered in the future, but these are beyond the scope of this article. How- ever, the tracking form has been set up to accommodate use of a budget, as part of your tracking system. Spaces/cells are provided at the bottom to insert your monthly ‘Budget’ numbers for each of the four categories, your ‘Actual’ monthly numbers and ‘Vari- ances’ (the difference between your budget (what you planned) and what actually happened). The ‘Variance’ percent (%) is also calculated. Budgets are a planning tool, not a crystal ball! Capturing the Jobs/Sales Info As you can see, Figure 2 is in exactly the same format as Figure 1 except that here we are capturing and recording the correspond- ing number of jobs/sales instead of the sales/revenue dollars. For each day, this answers the questions: How many sales dollars? How many related jobs/sales? In each category and for all sales? Looking at both tables side by side is a window into the soul of your business’ sales/revenue performance. When we know the sales/revenue and we also know the corresponding number of jobs/sales, we can then calculate the average sales/revenue per job/sale. With this daily data, we can calculate and look at this average for one day, month, year or whatever period of time we choose. We can also compare performance results between or among several months or look at trends for a particular category, several categories or the consolidated look at all categories combined. Using the averages obviously helps to smooth out the normal daily ups and downs that are typical of most businesses. Additional Benefits from Capturing Daily Data Aſter we have collected and recorded months of performance data, in addition to seeing trends, we also have the historical foundation for developing our sales/revenue budget for next year. Yes, now we have a repository of relevant historical perfor- mance data that offers many opportunities for benchmarking, analysis, business modeling and providing insights. 30 KEYNOTES JULY/AUGUST 2019 Other Tracking In addition to tracking the business barometers/variables al- ready covered, we can use this same approach for tracking other things. For service businesses, a service vehicle is equivalent to a machine on a factory floor, or we can choose to view it as just a mobile moneymaking machine. Why not track and measure the sales/performance of a service vehicle? What about tracking a technician’s performance? If your technicians are consistently assigned to a particular vehicle, then you can track and monitor both using one form. If ap- plicable and not already happening, you should also consider using a tracking system for a department, branch or whatever unit(s) makes sense for your particular business. Project when you will need to hire one more technician. Want to know how your recent price increase may be impacting your business? Is that new competitor eating your lunch? Pay particular atten- tion to your trends! You’re probably already using some method to assign sales to a particular individual. Many accounting programs include features for ascribing sales/revenue to an individual employee. This facility is oſten used for tracking performance and earn- ings for commissioned sales people, but you can also use it in non-commission situations. Lots of useful reports can be generated directly from your accounting system if you set it up accordingly! What Matters Most Is to Get Started What matters most is to recognize just how valuable daily cap- turing of a few pieces of data can be. Then, start small, capturing data that is relatively easy to acquire. Just get started, institu- tionalize the tracking discipline into your business culture and make changes later as you gain more experience. Of course, you need to invest some time to set up the system but this will save you time in the long run. Don’t delay or define success as perfection! There is an old adage that says, “When gathering information, it takes as long to acquire the last 10 percent as it does to gather the first 90 percent.” So, if neces- sary, just settle for the first 90 percent and move on. WWW.ALOA.ORG
