Welcome to the "Talk About Your Business Page"! We're happy to have you here. I'd love to share a great article from the
QuickBooks Firm of the Future site that covers data analytics and how it can fuel your small business and mid-market growth.
Before doing a deep dive into analytics, you need to be able to answer a few questions about your business to make sure you're on the right track to begin with:
- Are we focused on the right things?
- Is our quality where it needs to be?
- How are we doing financially?
- Where are our opportunities and challenges?
- Are our customers happy?
- Are our employees happy?
Once you've answered those questions and are satisfied with your answer you can move onto the business analytics.
One of the most important metrics to consider is the IRR, or Internal Return on Investment. This figure will tell you how attractive your business is to customers.Here are a few other metrics to take a look at:
- Unit economics - a method applied to analyze a company’s cost-to-revenue ratio in relation to its basic unit, hence the term; helps you understand the “source” of your revenue.
- Payroll Ratio - the appropriate levels of staffing for your company. Remember the potentially negative effects of labor reaching or exceeding 30%.
- Inventory = Also known as cash you can't spend.
- Cash Flow - the amount of money the company gets from sales, investments, and other sources, minus the amount of money the company spends on things like salaries, supplies, and rent.
The analytics of your business are there to help you keep everything in check. Focusing on metrics can assist you with any decisions you have to make or simply show you where any small adjustments need to be made. The full article is actually one of a 4-part series on offers even more info on this topic. Check it out by following the link above. Take care everyone!
