You’ve probably heard this before: “what you pay attention to, grows.”
Maybe a better way of saying it would be: “what you track, you can impact.”
We believe this be true. We have seen this at work in our own lives and businesses.
Of course, anyone who has ever tried to lose some weight knows all about this idea. The first thing you do when you are trying to drop a few pounds is to watch what you eat. It’s no longer just business as usual — you pay attention to what you’re eating and how much you’re exercising.
When you go on a diet, you typically track big, easy-to-track numbers, like the calories you consume and the number of minutes you spend jogging.
If you were to track a huge amount of numbers on a diet, it would quickly get overwhelming. Imagine keeping tabs not just on calories, but on grams of fat, protein, carbohydrates, whole grains, sugars, and riboflavin. You would have too much information to keep in mind. Your diet just got a whole lot more complex — and you’ll need to use a lot more brainpower to make it work.
The point is: you want to track the right numbers — and only the right numbers. This is true for your business as well.
You don’t want to get distracted or confused by focusing on too many numbers or the wrong numbers.
So what is important to pay attention to when you are running a roofing business?
Unfortunately, it’s a little more complex than a diet. There are more factors that impact your success, more than just “calories” and “exercise.” But still, let’s keep it simple and focused.
First off – most importantly – you want to watch your profit. As you know, profit is the amount you take in minus what you pay out.
So you have to watch those numbers, too: your revenue and your expenses.
Where does revenue come from? From paying customers, of course — so you’ll need to track those, too.
But don’t just focus on the number of customers you are able to generate. Instead, look at the number of leads you get — and how many of those you are able to convert to sales.
That means you’ll want track leads generated and sales made, too.
These numbers are a good starting place. They represent big, important, and clear aspects of your business that you need to know extremely well.
So the five numbers to track . . .
Look at (1) profit — which is made up of (2) revenue and (3) expenses.
Loot at sales — which is made up of (4) leads and (5) closed sales.
If you focus on just those five numbers — and you work on improving them month over month — your business will improve as well.
Once you have a firm grip on those key five, there are other numbers that you will want to look at. These other numbers can be valuable, too. For example:
- Gross Profit vs. Net Profit (after overhead has been paid)
- The amount of hours you work. (We believe that this number should not too low — nor too high. Don’t work too little, but don’t work too much and just wind up running in circles.)
- What you spend those hours doing. Track the amount of time your activities take.
- Track where your leads come from. What are your best lead sources?
- What jobs are you producing? Are you caught up? Do you have a backlog?
How to track?
Part of being serious about your numbers is committing to a system for tracking them.
The system you choose could be on the more powerful and automated side (we are sort of big fans of roofing software) — or it could be as simple as a pen and a notepad. (Or it could be something in between, such as an Excel document.)
What’s most important is that you dedicate yourself to updating and reviewing your numbers on a regular basis. (Every week is probably best, but you could go every other week if that feels better.)
What you track, you can impact. So go do it!