If you’ve been following along on here this year, you probably know that I’m a bit of a Mathematics nerd.

From my posts about replacing yourself in your small business (and how it’s just algebra), to how math can be what slows down many small businesses – there’s really no avoiding the numbers in the business world – small business included.

Knowing (And Understanding) Your Numbers (Inside & Out)

I’ve worked with some great (remarkable, really) small businesses over the years.

While there are many attributes that I can point out that made them great (including a nicely streamlined sales process), one of the things that stands out is their understanding of their numbers.

From having expected revenue targets, to number of projects/jobs, to profit per job/project/service – the best ones know these numbers inside and out.

While it’s good to get help from an accountant for some of these (and for setting up your books & keeping important financial records), there are some overall numbers that you can keep in mind.

Capacity: How many projects/jobs can you do in a day/week/month/quarter/year?

Why it matters: not knowing capacity means not knowing how many projects/jobs you can do in a day/week/month/year – not knowing this, you don’t know how much revenue/profit to expect, or how many sales/bookings your sales/marketing efforts need to fill that capacity.

Revenue & Profit Per Project/Service/Job: What is your profit per service/job/project?

Why it matters: maintaining a profitable business starts with keeping each service/job/project profitable and accounted for. Your target profit likely needs to hit a certain percentage to cover additional costs of running your business (also known as overhead), so it might be helpful to get an assist from your accountant to help you determine this.

Leads/Opportunities: How many qualified leads (selling opportunities) did you have last month/quarter/year?

Why it matters: no leads, no projects/services. Counting leads is vital for understanding the effectiveness of your marketing (and help you get an idea of market size changes), so if you’re not counting these, you’re kind of flying blind.

The End Game: Annual Revenue & Profit Expectations

Why it matters: it’s the end goal – what you can expect your business to achieve financially after all is said and done.

If you understand your capacity and revenue/profit per project/service/job, this is extremely easy to work out (or at least estimate) (Number of Projects/Jobs x Revenue or Profit Per Project/Job).

Your Numbers & Marketing (Digital Or Otherwise)

As you can imagine, understanding your numbers is vital to your marketing efforts.

If you don’t know your capacity, you don’t know how many collective leads/selling opportunities you need to fill that capacity.

If you find yourself constantly running at capacity (and missing out on projects because you’re overbooked) it could be a sign that you might want to expand that capacity – which means you’ll need ways of maintaining (and increasing) the number of leads/selling opportunities you need to fill that extra capacity.

If you find yourself scrambling to fill the capacity you do have (and selling opportunities are slowing down) it could be a clue that your marketing efforts may need some attention.

However you map things out, most roads in business connect to your marketing efforts – including – and most importantly – your numbers.

Numbers Give You Clarity (And A Guiding Light For Growth, Stress Reducer)

Unknowns in business cause stress.

While numbers don’t tell the whole story or can completely remove stress from the equation, they can help make the unknown, known.

Knowing and understanding your numbers inside-and-out helps you predict not only what to expect throughout any given year, but also helps you plan for growth when the time comes.

Growth can be incredible stressful (and may feel complicated/intimidating) – but it’s less stressful when you know your numbers.

Growing small businesses are great small businesses – and greatness comes from knowing just a few important numbers (or metrics).