Getting my MBA from Arizona State University was one of the best decisions of my life. I could make a million great decisions from now until the day I’m in the ground and that statement would still hold true.
If I could give you one piece of advice that I picked up during my program at ASU, it’s this: watch all your numbers. You don’t need an MBA to do it, either.
A number of years ago a new restaurant opened up down the street from my house. They advertised everywhere, and I mean everywhere. I couldn’t get away from seeing their name or finding one of their coupons in my mailbox.
Eventually I broke down and went in. The food was good. The place was packed. It seemed pretty successful. At one point the owner came around and asked our table how everything was. I told her it was great, and then I asked a very important question.
“How many new customers did you get this month?”
She told me she wasn’t sure and offered a guess.
About a week later, I was in a favorite restaurant of mine, one that had been in business for over 25 years. I knew the owner and he knew me, and I asked him the same question.
He knew not only how many new customers he got that month, but also the breakdown of how all of his new customers had heard of his restaurant, whether it was Facebook, Google, word of mouth, etc.
Not knowing the number of new customers isn’t going to be the thing that makes or breaks your business, but the difference between the two restaurant owners knowing their numbers is an indicator of which business is going to continue thriving.
Why do I say that? Well, I guarantee you that an owner that pays that close of attention to the number of new customers he or she gets each month is also going to pay closer attention to every other number in that business, and that kind of attention to detail is what will inevitably separate the places that thrive for a quarter of a century from the ones that close up shop when those new customers stop caring about free coupons.
The following excerpt is from my new book, “Uncomplicate Business: All It Takes Is People, Time, and Money.”
Excerpt: Millionaires become millionaires not because of what they make, but because of what they save. You don’t need to be a genius to understand that if you spend more than you make, you’ll end up broke. The world has plenty of broke geniuses. …
To fully understand the importance of numbers, you need to take a step back. Reexamine your personal life and your personal financial goals. I tire of listening to fellow dentists complain that their practices are failing, that they can’t afford to undertake a marketing campaign to attract new patients, while they live in mansions and are willing to lease a Mercedes-Benz at a thousand dollars a month.
If this is you, take a good look at yourself in the mirror. Why aren’t you making the tough decisions? Are you concerned about how your stay-at-home spouse will react if you say it’s time to rein in your household spending and to get a job? Are you afraid that downsizing your house and trading in your BMW for a practical car will cost you your high-class image?
Put your Rolex up for auction on eBay, and you might pick up a couple thousand dollars along with the revelation that you’ve invested too much money in needless stuff. To borrow a line from the movie, Fight Club: “The things you own end up owning you.” You don’t need the boat. You don’t need the vacation condo, the fancy cars, or the membership to the country club. You can’t afford to go out to eat four nights a week. You need to sit down and figure out how to cut your personal expenses, because they’re also eating into your business’s bottom line. Seriously, how good does it feel that you bought your wife that Gucci purse or your husband a new Rolex watch? That’s $5,000 that you could have reinvested in your business. You could have built a new website for your business for what you dropped on a fancy handbag or watch.