I was talking with a colleague the other day about his firm. He was happy things were moving in the right direction. He even mentioned that his spouse started looking at the numbers of the business and as a result has made adjustments in order to generate more revenue. He made an observation that many firms and by extension black businesses don’t know their numbers and if they did they more would be successful. I have to agree. Many businesses come to me to brand their company. I realized that in order for us to succeed I needed to know their numbers. Yet, many of them didn’t know it themselves. That’s a problem.
How can we do something successful for your company if we don’t have anything to gauge it against? Numbers don’t lie. They’re where the rubber meets the road. While we all measure success in various ways, at the end of the day we know there’s a specific number we have to hit in order to finance our lifestyle, as well as our employees’ if we have them.
The problem is that many keep those numbers close to the chest and don’t share them for fear of judgment or being taken advantage of by vendors, employees, and heck, even family. Come on we got that one family member that thinks because we have a business we’re loaded. So far from the truth. Nonetheless, if you want to take your firm to the next level you do need to lift the veil on your numbers in order for your team to be successful.
As business owners your job is not to work in the business doing the tasks to keep the doors open, but to work on the business doing the tasks to grow the business.
Numbers You Need to Know
What is your personal hourly rate? How much do you need to make to break even? What’s your annual operating cost? What’s your profit margin percentage? What’s your average sale? How many people do you need to reach to generate one sale? What’s your close percentage? Those are general numbers you need to know. Let’s get industry specific.
What is your core cremation cost? How much is the average casket? What’s the average cost for a traditional burial? How extensive do you know those numbers? Knowing those numbers can give you a competitive advantage.
For instance, I conducted a discovery session for one of my firm clients and he was lamenting how little time he had to devote to growing his business since he was running around so much handling cremation tasks. For those that don’t know a discovery session is an intensive 3-4 day workshop where we go through every part of your business to “discover and diagnose” all the problems hindering your growth. During the session we then went through each task he has to undergo when cremating someone. We also broke down the cost and time it takes to do each one including travel time. Based on his average cremation rate his core cost was 1/3 of that and it took him 10 hours to perform all the tasks from start to finish. That made his effective hourly rate $101.50. Not too shabby, but there’s a problem. He didn’t have enough time to grow the business because he was spending too much time running the business.
That may sound like an oxymoron, but as business owners your job is not to work in the business doing the tasks to keep the doors open, but to work on the business doing the tasks to grow the business. Spending 10 hours per cremation making $101.50 is fine if you want to stay a one-man operation. However, you’ll never be able to take a vacation because there’s no one there to handle cremations while you’re gone. Every lost sale is lost brand growth. Not only that, what happens when you get 6 in a week? You don’t have enough time to handle that along with everything else you need to do to run your business. That’s where knowing the numbers helped. We created a system that allowed for growth by bringing in someone to be a runner. Yes, profit goes down a bit, but he gains something more important, time. He can devote his time to other tasks that will grow his revenue. The runner system also allowed for cremation growth because the more cremations he could take on the more hours he can give to his runner, increasing his personal wages making him happy because he has job security. Everybody wins.
This is how deep and specific your numbers knowledge should be. While some should be memorized others you simply need to have access to when you’re going over the books or discussing something with an advisor or team member. This allows you to analyze the numbers to identify problems or potential ones and create viable solutions.
What Numbers To Share
First and foremost, never share what it cost you to do something with anyone except business advisors and spouses. Advisors have set rates for helping you and their job is to help you make more money so you continue to go to them. Letting your spouse know your numbers, especially if you’re working together, will help them come up with ways to increase profit or time.
Others numbers you want to share are sales numbers, revenue projections, acquisition costs, marketing costs, operation costs and numbers like these. These numbers serve to raise awareness and empower others on your team.
Who to Share Your Numbers With
Before leaving the corporate world, thank goodness I did, I worked in the advertising department of a larger grocery chain. We got a new Senior Vice President and one of things he did was unite the entire department. One of the ways he did that was by sharing the numbers. We had a monthly all department meeting. In the meeting he shared the monthly revenue numbers and where our teams, individual or as a whole, had a direct impact. It served as a confidence boost for the department and united us since we had a better understanding of the roles and responsibilities of others. More than that he shared revenue projections (goal, adjusted and actual) for the upcoming months. He talked about ways to reach those numbers and off we went trying to reach hit them. Naturally, for some, reaching those numbers would mean bonuses, for others you could leverage your contribution to justify a higher raise. See what I mean when I say it all boils down to hitting a specific number to finance your lifestyle? What does that mean for you?
Sharing your revenue projections will empower your team to hit them. If you further incentivize them making it a contest or providing a reward you can unite your team. After all, when one wins all win. Sometimes knowing those numbers will empower you to reward others just because. Mark Cuban, serial entrepreneur and Dallas Mavericks owner, would famously go around just giving his sales team $100. Just think about the psychological boost you get receiving a reward, “just because”? No doubt Mark did it because he knew his numbers enough to know he could afford to do so. In the end he would make so much more than he spent and increased staff loyalty and diligence. However, once you share the numbers you have to show your team how to reach them.
Creating Programs to Reach Your Numbers
Knowing your numbers means nothing if you don’t have a way to reach them. Getting more sales or talking to more families isn’t enough. Just like numbers are specific so your programs need to be. Create a step-by-step process your team can implement to reach your numbers. Having it step-by-step will allow you to accurately measure the success or failure of it. This is where many go wrong. If a marketing or sales program isn’t working an owner scraps the whole program rather than going back to see where breaks in the process happen. Think of it this way. When you get a flat tire the tech goes through a step-by-step process to determine where the flat is to see if the tire is salvageable or needs replacing. Which is the cheaper option? Similarly, fixing a break in the chain is cheaper in the long run than scraping the whole program unless the issue is major. Even if it is major, knowing allows you to fix it making your business stronger. Create a step-by-step process so you can accurately measure the success.
Tracking Your Numbers
Notice the figure here. This is your potential family going through a step-by-step process to determine if your firm is the least risky one to lay their loved one to rest. Did you see where breaks in the chain could happen? Many of the breaks that would cause a family member to go elsewhere before they even call you. Thus by extension saying that your sales program is failing because you’re not getting calls is inaccurate. Let’s go back to my firm client whom we did a Discovery Session for. He mentioned he stopped a SEO (search engine optimization) service because it wasn’t working. I told him he doesn’t know that because, like everything else, he had no systems to track and measure success. He could be doing his job, but you’re blaming him for something you have no control systems for. I told him SEO’s job is to create top search engine results, which would invariably lead to more sales.
Let’s say it was working. His business was first page on Google. What’s the next step in the process? A family is going to check your reviews. Did he have any bad ones that needed addressing? How long ago? How many people viewed your Google listing compared to how many clicked to view your website? The issue could be there. If they click on the website, is it nurturing the interest enough for the prospective family to take the next step in the process? How long do they stay on the page before they leave? What page do they leave from? The issue could be the website or a specific page. If the website does its job well they should call or send an email inquiry. How many hits to the website are you getting? How many of those hits translate to calls, email inquiries, or even stop-ins? You can see all the potential breaks in the chain that go beyond just SEO services potentially affecting the main goal of more sales.
As firm owners you must understand the user journey, every brand touch point they will interact with before they make the decision to use your firm. This is to ensure you’re providing enough content that makes their buying decision yes. Does this mean you have to be an expert in marketing, accounting and other things related to your business? No. However, you do need to know enough to hold a person accountable or see if they are doing something unethical. In the movie, Fast and Furious Tokyo Drift, DK’s Yakuza uncle comes in to inspect the financial books. He says to his nephew it looks so confusing to which his nephew replies, “it’s easier than it looks.” His uncle then says, “Then how is it that even I can see your friend is stealing from us?” If that were real Yakuza, his mistake would have cost him a finger. His uncle knew he didn’t know the numbers well, but he did know them well enough to identify issues. You can avert costly mistakes to your business by creating systems to track your numbers.
Knowledge Is Power
Malcolm X was right when he said, “knowledge is power”. The more you know about your business the better you can make it. Don’t leave your future in the hands of others. You do that when you don’t know enough to give your firm a competitive advantage. I’m not exempt from this either. I went for years thinking I was doing well until I looked at my numbers. It was the biggest wake up call ever. I could have gotten a low-end job for the amount I was getting paid. As a result I made drastic changes and quadrupled my revenue the next year. Start learning your numbers and you’ll see some major changes in both yourself and your business. Until next time I wish you much success turning your firm into an amazing brand.
Bio
George Paul III is a branding and strategy expert and award-winning designer. He’s the Founder of Cherished Keepsakes, a creative agency that passionately honors legacies of both firms and families. They honor legacies through their line of amazingly designed funeral products such as programs, prayer cards, buttons, bookmarks, photo collages and more. George provides branding and business advice through his blog, Seize the Brand, an education platform designed to empower business owners by leveraging the power of branding to realize business and life goals. More resources available at www.cherishedkps.com and www.seizethebrand.com
Originally published in the December 2019 issue of NFDMA, The Scope Magazine
