By Gregory Daniel
I don’t know anyone who doesn’t want to grow their business. Spoiler alert, as Peter Drucker would say, “If you can’t measure it, you can’t improve it.” Does it feel like you are reinventing the wheel every day? Do you find yourself watching an educational video and wanting to wipe the table clean and start from scratch? How about walking through a trade show and not being able to focus on what equipment or products will truly move your business forward. Having your own business is hard work. Being responsible for generating new clients every day or offering the right products can be a daunting task, not to mention having enough cashflow to pay all the bills. Unless we are clear on the habits and routines we want to employ, we will drive ourselves crazy unintentionally falling into bad habits.
I bet you can remember first learning how to drive and being taught how important those dashboard dials were. There are a lot of moving parts on a vehicle and a magnitude of components that can fail. Someone decided on a handful of critical indicators to keep us out of trouble and stay on course. Once early in my driving experience I heard a loud engine bang and saw something bouncing in the rearview mirror of my dad’s Dodge Dart. After towing the car home, I received the “lessons learned debriefing” (Dad was a major player in the NASA space program and this is how they did things). He asked why I ignored the flashing red oil light on the dashboard and I realized I was going to have to start paying attention to those indicators. This lesson has been instrumental in creating measurement tools for my business. I routinely look for flashing red lights in my business and make sure I’m attuned to the levels of different indicators at our studio.
So, let’s take a look at some of the major dashboard measurements that can keep you from blowing your business engine.
Lead Measures – How many qualified people do you have in the pipeline that are possibly one step away from becoming a client? These could be from gift certificates sold during a philanthropic event or silent auction. Maybe you have a relationship with a vendor that has provided names of people who are very interested in your products. This is a great indicator of future revenue.
Booked Appointments – How many sessions or events by month do you have committed with deposits on the books? This is another strong indicator of future sales revenue and projected cashflow. If you offer different product lines it is helpful to have an indicator for each line.
Sales – Total monthly sales; In addition, we like to break down sales by product line and average sale per client within that product line. For some of you it might be as simple as Wedding Sales and Portrait Sales.
Receipts – This is the amount your clients have paid you during the month. You may have made the sale or booked appointments, which will be tracked above, but this is tracking when the dollars are collected.
Expenses – Every dollar you have spent during the month. This includes salaries and investments like equipment. Pay attention to the relationship of how this measures against the receipts number. Managing the balance between the two is the best way to keep your cashflow healthy.
Cash on hand – The difference between cash in (receipts) and cash out (expenses) for the month. This helps us know the health of our cashflow and estimated profit.
These indicators are just measurements for your dashboard and will not be effective if you don’t tie each of them to your goals by month, year to date, and against the previous year. You may want to measure more areas that are specific to your business model and growth. This is just an example of our dashboard that has helped us be successful and grow for over 43 years. If you’re looking for additional resources in this same vein, you might be interested in Donald Miller’s Business Made Simple Series and Keith Cunningham’s book The Road Less Stupid. Equipping your business with solid measurement tools might not keep you from blowing up your dad’s car, but it just might help you grow your business.
Greg and Lesa Daniel are internationally recognized for their artistry. Though he is one of the most awarded photographers in the United States, Greg has the utmost privilege of living out his passion every day alongside Lesa in operating their portrait photography galleries in both Indialantic and Titusville, Florida. Greg was one of the youngest members to be inducted into the prestigious Cameracraftsmen of America in 1991, and a proud founding member of the International Society of Portrait Artists (ISPA). To learn more about them, go to GregoryDanielPortraits.com.