Monday, March 22, 2010

Quantification - Big Word With Big Results

Besides the money that you put in your pocket from your business enterprise, how do you really know you are growing, doing the same or going backwards? The only way you can really keep up with the progress your business is making is by keeping some accurate numbers that reflect your success and compare the historical data on a regular basis.

This may sound like the work of a statistician, but it is the necessary gauge on which you can determine the progress and direction of your business. The information does not need to be detailed but should provide you a historical benchmark from which you can easily compare your ongoing results and make future plans.

For example, you sell 100 widgets this week. Next week you sell only 75. With this very basic information you can look back at last weeks sales and attempt to determine why you sold more last week than this week. Then compare your widget sales monthly. After one year you can look back over the past 12 months and determine which months are best for your business and which are worse.

You do not need an expensive computer program to track your ongoing results. A simple spreadsheet will do the calculations for you and is easy to set up. If you have no experience with spreadsheets, it's time to learn. A spreadsheet can be the most useful and least costly business tool you own.

Historical data collected about your business is the best mechanism for determining the future direction your business should pursue.