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  • Writer's pictureDel Chatterson

By the numbers

By the numbers

Not just the ones you already know

Most entrepreneurs and business owners regularly monitor a few key numbers – sales, profit margins, operating expenses and the bottom line. All easy to understand and regularly reported.

But it is not enough, if you want to be a top performer in your industry. You need to dig deeper to more quickly recognize growing problems and exploit competitive advantages.

Managing by the numbers is a requirement at all stages of running a business. From the initial business plan on start-up, through the performance challenges of growing a sustainable business to the final valuation on exit. Managing the numbers requires monitoring and comparing: to your goals and objectives, to past performance in the business, and to industry benchmarks for the average and for the outstanding competitors.

And it is not just the obvious financial ratios: profit margins, debt ratios, asset turnover, but especially those that are particular to your industry. Maybe that is revenue per engineer, turnover per tabletop, scrap per square millimeter, or per cent billable hours. You may have your own secret formula, but the industry, your banker, investors and future owners will have expectations based on industry benchmarks and will decide on what reflects good or bad management. Be sure to keep score on yourself before someone else lets you know how you are really doing.

From start to finish, monitor and manage the key variables that will determine your long-term business performance.

Be better. Do better.

Your Uncle Ralph, Del Chatterson

Contact DirectTech Solutions at for consulting assistance on your strategic business issues, growth and profit improvement plans or your exit strategies.

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Read more articles at: Learning Entrepreneurship Blogs.

Click Here to check out Uncle Ralph’s books, "Don't Do It the Hard Way" and "The Complete Do-It-Yourself Guide to Business Plans" Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

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