Does your business have a scoreboard?
Would you go to a hockey game if it didn’t have a scoreboard?
Seems pretty pointless, doesn’t it?
Whether you are a competitive person or not, keeping track of who is winning (and who is losing) is a fundamental aspect of team sports. As spectators, the thrill of keeping score is half the fun!
However, one doesn’t need to be a sports fan to appreciate the value of a good scoreboard. Those with a keen interest in business can also benefit from knowing:
- What a scoreboard is
- How to measure and report points
- Why keeping score matters
A scoreboard differentiates the winners from the losers
According to a Business Startup Statistics Canada 2021 report, 17% of start up companies fail because they lack a proper business model.
Even more sobering? Fundera estimates that by their fifth year in operations, roughly 50% of all new small businesses will crumble and dissolve.
These statistics aren’t shared to be demotivating…the opposite, in fact.
What these numbers do is illustrate the importance of differentiating yourself from the multitudes of businesses that will go belly up.
How do we avoid such a terrible fate?
One trick is to use a scoreboard.
What kind of scores should your business be keeping?
It was Warren Buffett who said, “If you can’t read the scoreboard, you don’t know the score. If you don’t know the score, you can’t tell the winners from the losers.”
Ask yourself the following questions.
- Am I receiving report cards from my accountants and bookkeepers?
- Am I looking at them? Do I know what they are telling me? Do I know which numbers are important?
- Can I make my business and financial decisions by looking at my report cards or am I flying by the seat of my pants?
- Which levers should I pull to improve my results?
If you replied, “no” to any of these statements, then consider revisiting your scoreboard.
Right now, it is missing points.
Or perhaps they are there – buried somewhere – but your team simply lacks the reporting mechanisms to accurately pass on this vital information to the business owner (AKA you!) for analysis.
Keeping track of the score is needed to evaluate the strength of a business
Then, you can start thinking about your balance sheet.
Basically, a balance sheet is the equivalent of a snapshot.
It’s a reflection of a point in time and will help to measure the health of your business from day 1 all the way to day 365.
In summary, to know how strong the business is, plan for growth, and increase sales, you must, must, MUST have a scoreboard.
Measuring and reporting your business results is the only way to create sustainable business success.
Are you getting the information you need?
To strategize your next move, consider booking a no obligation 15-minute consultation call with John.
The Ultimate Guide to Scaling Your Business
How to grow your business without sacrificing time freedom
This post is part of my Ultimate Guide to Scaling Your Business. Visit the guide homepage to get my best advice and coaching exercises to help you:
- Develop systems and processes to free up your time
- Hire and manage a great team to run your business (mostly) without you
- Make the mindset changes that enable you to grow your business bigger - faster than you dreamed possible