ep009: The Numbers You Need to Track in Your Business

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If you are unsure of what you should be focusing on in your business, or if things just aren’t making sense, it may be because you are not tracking the numbers in your business. Focused data collection will show you the reality in your business and give you a clear look at what’s working and what isn’t.

In this episode, I share why it’s important to track numbers in your business. I also provide tips on the business metrics, marketing metrics, and sales numbers that you should be tracking. This information will help you finally get the results that match the effort that you put into your business.

In this episode of the Business (R)Evolution Podcast:

  • When the results don’t match your efforts
  • Collecting objective data
  • The importance of tracking numbers in your business
  • The correlation between numbers
  • Separating personal and business accounts
  • The business metrics you should be tracking
  • The marketing metrics you should be tracking
  • The sales numbers you should be tracking
  • The value of the sale
  • Focused data collection
  • Choosing a cadence for analyzing data
  • And more!

Resources and links Joanna mentions in this episode:

Joanna Sapir is a business strategist and coach helping innovative wellness practitioners build more profitable and sustainable businesses. She's on a mission to build a movement of people creating a new vision and reality for our future as humans on earth.

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Full episode transcript

Do you ever feel like you’re shooting at a target in the dark when it comes to growing your business? Such as you don’t know what you should be focusing on or there are things going on in your business that don’t seem to make sense? 

Or perhaps you’re feeling like you’re spending a lot of time and energy on a specific marketing method that feels like it’s working – like you have 5000 Instagram followers and growing, and you’re putting out regular content – and yet not seeing more clients and more income and wondering what’s going on?

Or, you know you have more clients now than you did a few months ago, and yet you don’t seem to have more money in the bank? What’s going on?

These kind of scenarios – when we feel like we’re shooting in the dark and just guessing about what we should do in our business, OR when you’re doing things but the results just don’t seem to match up and it’s confusing and you’re wondering what’s going on. These kinds of scenarios indicate you’re not able to actually SEE what’s happening in your business objectively. 

You’re not collecting objective data that shows you what’s actually going on. 

And as a business owner, it’s important that you start collecting the kind of objective data that shows you what’s working in your business and what’s not.

When we don’t have objective data, we’re relying on how things feel and we’re blind to whether what we’re doing is actually creating the results we want. 

And I do believe that your business should feel good to you. How you feel about your clients, your marketing, your sales process. I think that’s totally important. I want all of your business systems and processes to be aligned with your values and vision. 

But the numbers, the data, matter just as much. 

So, you may really enjoy seeing your Instagram follower count grow, and you may really enjoy putting all that content out, but you need to be able to see the reality that your follower growth is not resulting in client growth. 

That’s important data. It doesn’t tell us yet what’s missing or how or whether we can change that, but it gives us an objective understanding of what’s actually the reality in our business. 

Many business people would say the numbers matter more. And there are some business coach-types out there that would say the feelings matter more. 

I think they’re equally important, and that without one, you have a major imbalance that will greatly limit your ability to build and maintain a successful business. 

In our world of practitioners doing transformational work with clients where you’re helping to really change their lives in some way, we lean towards relying too much on the feelings.

So this episode is all about just how important and powerful it is to track the important numbers in your business.

And I’m going to share the key metrics, what numbers you need to track in your business, to see more clearly what’s going on.

AND how you can use these numbers to forecast what’s going to happen in your business. 

And perhaps most importantly, to see exactly where and how to focus your efforts for growth.

If you’ve felt confused about what you should focus on in your business, this is a way to see more clearly what to do in your business to get the results you want. 

I’ve got a free download for you in this episode. It’s one of my favorite data collection tools! It’s my Sales Tracker and it’s where you can track all of your prospects, sales, and sales numbers. 

So let’s dive in….

I’m going to start in the most obvious place, with your financial numbers that you’re probably already tracking to some degree. 

Hopefully you have a bookkeeper or a bookkeeping service that does your monthly bookkeeping or maybe you even do it yourself. 

If you do it yourself I actually think that’s great as long as it’s simple and doesn’t take a lot of time. It helps you keep your fingers on the pulse of the financials in your business, and what’s coming in and what’s going out. 

But I will note that in the long run, as your business gets busier or more complex, that’s probably something you’re going to want to outsource. You’ll want to hire a bookkeeper or bookkeeping service

Yet, as I’m talking about in this episode, you’re always going to want to know what those financial numbers are. You’re going to want to look at the financial reports each month, even when someone else is doing them. 

I’m also going to insert something in here: I have had a couple clients over the years who did not have their personal finances and business finances separate. They had one bank account for everything and so the fact that I’ve had a couple clients in that situation means that you listening you may be doing that as well, or there’s at least some of you listening in that situation… 

And I just want to say that if that’s you, it’s an action step to take right now to separate your personal and business finances. 

There’s so many important reasons to do this, but the most important is being able to see reality, to see exactly what’s going on in your business. 

And you need your business finances to be separate so that you can see what’s going on in your business. That’s just one reason, there are other reasons – both energetic and legal – that those bank accounts should be separate. So if you have one bank account for both personal and business, go to the bank and open up a business account.

And if you’re in the United States when you open a business account there’s a different kind of business account for Sole Proprietors vs. whether you have an LLC or Corporation. So if you happen to right now be a sole proprietorship it’s likely that if you’re planning on on growing your business to really be a full-time business supporting you or maybe it is already but you don’t have an LLC or corporation and you’ve been operating as a sole proprietor –  it’s very likely that it’s going to benefit you taxwise and legally, liability-wise to form an LLC or a corporation. 

That’s a decision you make with your accountant and/or business attorney, or reach out to an accountant or business attorney to consult with them to find out whether that’s something you should do. It’s just a heads up that if and when you change from sole proprietor to an LLC or Corporation, you will have to change the bank account. That’s kind of a pain in the ass which is why I’m just mentioning it just so you know. 

All right, I’m sure in the future I’ll have some experts on that can talk more about that, but for now that’s all I’ll say and let’s move into talking about the basic Financial metrics you should be tracking and looking at.

The basic financial numbers you should be tracking are:

Your Gross Revenue – each month, year to date, AND monthly average over 12 months or year to date. 

Your Gross Expenses – Per month, and monthly average. 

Net Income – This is your profit. This is the proverbial “bottom line” – because it’s at the bottom of your profit and loss statement. It’s what’s left after all your expenses have been taken out. 

Now, remember that your expenses include your pay, so your net income is not what you take home each month – it’s what’s left after all your expenses, including your pay, are taken out. That’s your profit. That’s the extra and should be used strategically.

Net Profit Percentage – This is looking at what percentage of your gross income is profit – it’s often referred to as your profit margin – and of course that gives us an added layer of understanding of our income and expenses. 

Ok, now let’s look at some basic marketing metrics you should be tracking. 

And let me note that for each of these categories of metrics (your financials, which I just covered, Marketing, which I’m about to get into, and the last one is Sales metric) you can totally track more data than what I’m suggesting. What I’m suggesting is some basic data for you to start with. 

In the long run, though, you might really get into the power of knowing your numbers and start to see what other data you want to track that you think will help you understand your business better, see where you want to focus your efforts and track those efforts. 

Ok, so the basic marketing metrics that I recommend tracking:

Total New Leads – each month. If your business is set up the way I help my clients set up their businesses, this is easy to track because every new lead gets automatically dropped into your email list as a new lead.

Percentage of leads by lead source – each month and/or year to date.

Total people on your email list – each month. This number will be made up of Leads, Current Clients, and Alumni – and if you want to get granular, you could flesh out each of those.

Marketing investment in dollars – each month. This should include: promotions/advertising, email marketing software, podcast production, website maintenance and gifts for clients.

Marketing investment as % of total revenue

Website- unique visitors.

Website – referral source by percentage.

If you’re using social media as a marketing platform, then you want to track the data that you can: follower count, each month and year to date. 

Ok let’s move on to the Sales numbers, because you know, I love the sales process and sales numbers.

New Prospects – per month. 

Lead to Prospect conversion by % – per month and year to date. 

Prospect to Client Conversion % (aka “close rate”)  – per month and year to date. 

% of Clients by lead source – per month and year to date. 

Total sales in $ – per month and year to date. 

Monthly revenue PER PROGRAM OR OFFER. 

Average sale value in $ – per month and year to date.

New clients – per month, per program.

# of Graduating clients – per month and year to date.

% of Renewing or ascending clients – per month and year to date.

Lost clients # – per month and year to date.

Okay so those are the basic numbers again you could have many more and I threw in a few fancy ones that you might even exclude from your tracking right now. 

The goal is not to be collecting tons of data, in fact it’s quite the opposite.

We want to be as focused in your data collection as you can to see most clearly what’s going on in your business. What’s the reality?

And the purpose isn’t simply to see what happened. All of these numbers that you’re collecting are just retroactive, they represent the past, they’re showing us what already happened, right? 

The real fun begins when we take this further than just looking at what already happened. Because we might not be too happy about what already happened and we want to make something new happen. 

And that’s where this data can be powerful.  We want to use these numbers to forecast what will happen in the future and even more powerfully to plan for actions that will impact these numbers in the ways we want.

So let me give you some examples of some of my favorite ways to use the data to help you focus on changing the numbers that you want to change.

Let’s say you have a small group program that you want to fill and a full program will be 6 people. So you need 6 clients and you are aiming to start the program on a certain date, let’s say that it’s 12 weeks away.

When you have the past data, you can look at it and identify formulas. 

So let’s say that your Prospect to Client conversion is 50%. That means that 50%, or half, of your qualified prospects enroll in a program with you. 

So if you want 6 new clients for this program, that shows you that you need 12 consultations with qualified prospects. 

That gives you such a clear focus for your next 12 weeks – you’re doing the actions that will get you 12 prospects to schedule consultations with you.

Now you can take that further at least a couple different ways. You can look at your % of clients by lead source data and identify what your best leads sources are and focus on those. 

So let’s say that 50% of your new clients were referrals from existing clients, and let’s say 30% are past clients returning, and 20% are referrals from other practitioners.

So you want to leverage what’s already working. If 50% of your new clients are referrals from existing clients, then reach out to your existing clients and let them know that you have 6 spots available for new clients that want to achieve XYZ, and give your clients instructions for how they can refer their friends and family and colleagues.

If 30% of your new clients are returning clients – from back when you still just sold sessions or packs of classes – then nurture your list! Send them emails showing that you see them and understand their pains and problems and goals and desires and offer them invitations to address those things. You can invite them to schedule a consultation with you to learn about how they can reach those goals or maybe you have a free event to invite them too that nurtures them more before inviting them to the consultation. 

You see how this works? 

You can use the data to direct your actions to reach your goals. 

Let’s look at another example. 

Let’s say you want to have $9000 per month in forecasted, predictable revenue coming in each month – meaning that your clients are on payment plans where that money is automatically being charged and dropped into your account. 

So using the Client Champion Formula model, many practitioners have a front-end, intensive program that all clients start with, and then some percentage of those people graduate into some kind of back end maintenance program or membership-type program.

Like, I have bodyworkers that enroll all new clients in a 3 month intensive program to address the specific pains that someone is coming in with, and then after that they might graduate to a once or twice a month maintenance program. 

Or I have people with online programs, like a 6 month initial intensive program, and then after that the clients may graduate to a year-long membership-style container that provides ongoing community and support for graduates. 

So a great goal once you’re at this level is for that backend program or membership to provide A significant amount of predictable Revenue every month. 

Now back to what I said before, let’s say that your goal is for $9,000 a month to come in consistently over the course of the year from that back end membership and let’s say that your back end program, membership, maintenance plan or whatever it is is $500 a month.

That means for $9,000 a month you need 18 people per year in the program to be getting $9,000 a month.

Beautiful. Now let’s go look at the data to what we need to do to get 18 people per year into that back end program.

If you’re tracking your graduation rate over time how many people from your front end intensive program graduate to the backend, we have that number, right?

So let’s say that over the course of a year you’re able to see from your data that 50% of the people of the clients that enroll in your front end program graduate to the backend. 

That means that to get 18 people into the backend program per year we need to see 36 clients in the front end program per year. 

How beautiful and simple is that. That’s the power of the data. 

It helps us see, we can see where to focus. So now we know that we want 36 new clients per year in the front end program. 

And we already looked at how to make that happen. 

You look at your close rate,  that’s the percentage of prospects that become clients, and that will tell you how many consultations you need to book to get the number of clients you want. 

So back to these numbers! We said 36 new clients a year in your front end program, divide that by 12 and you have 3 new clients a month. 

If your prospect to client conversion rate is 50% which is what I proposed earlier then you need 6 consultations each month to get the 3 new clients per month to get the 18 clients per year in your backend program.

And you can even move backwards from there and look at the leads to prospect conversion rate to determine how many leads you need.

Yeah? Get it? Isn’t that cool? 

This is the power of data. 

Remember that there’s two different layers here with the data. 

There’s simply collecting the data, which shows you what has already happened, retroactively. There’s nothing you can do about what already happened. But knowing the numbers helps you see what’s going on.

You can identify holes and gaps. You can identify patterns and correlations. And you can use those patterns to strategize and focus your efforts to meet specific goals. 

That’s the exciting part. 

I recommend that you first start collecting the data. And then over your first year of collecting new data, choose a cadence, a rhythm, for looking at it. You might start by looking at it quarterly. 

And that’s what I wanted to share with you in this episode. 

I hope it got the wheels in your brain turning, and that you’re inspired to start tracking your numbers. 

In the Business Revolution Academy, my flagship program, that’s our front-end program, and the Leadership Cadre, which is our graduate level program for practitioners ready to scale,  we provide tools for this kind of tracking.

One of my favorites is our simple sales tracker. It’s a place where you get to track every prospect and sale, see your numbers and celebrate your sales. 

We also have an amazing financial tracker that has cash flow forecasting where you can forecast into the future your actual cash in the bank every week based on your income and expenses, profit and loss graphs, income projections. It’s very robust and was put together and is supported by our money coach in the Leadership Cadre, Shaneh Woods. 

So if you want that level of support in your business, if you want to implement all this stuff I talk about with our guidance and tools, I encourage you to reach out to me and schedule a discovery call to see if one of our programs may be right for you. 

Ok, friends, until next time!