Data tells the story of your business, and goals give your business a benchmark to strive for. To get the most out of both, you should rely on them to work together for successful business planning.
By connecting your data to your goals, you can make more informed and strategic decisions to help your business thrive. Whether you’re looking to increase sales, expand into new markets, or improve customer satisfaction, using data can be a powerful tool to help you achieve all your goals.
Reaching Your Goals By Using Data
Start By Creating Goals for your Business
In order to connect your data to your goals, you first need to have goals for your business. This can be short-term goals, such as increasing sales in the next quarter, or long-term goals, such as expanding into new markets. But one thing is for sure – without clear goals, it’s difficult to know what data to collect.
To create goals for your business, start by thinking about what success looks like for your business. Once you have identified your goals, you can start thinking about what data you will need to collect and analyze to help achieve those goals.
Track the Right Metrics
Determining the right business metrics ensures that your business data is focused on the right things that will actually help you reach your goals.
The metrics you track will depend on your specific goals, but here are a few examples to consider.
If your goal is to improve cash flow, track the following:
- Expense budget variance, which is the difference between how much money was budgeted to spend and how much you spent. Watch for unexpected or large expenditures that can have a big impact on your business’s bottom line.
- Cost of goods sold, which is the total amount spent on creating and delivering a product or service. Even if your revenue is solid if COGS is too high, your business may not be as profitable as you’d like, and you won’t be able to generate the cash you require.
- Cost per sales channel, which is how much it costs to acquire a customer from a particular channel. This can help improve cash flow by targeting more profitable channels.
If your goal is to lower debt, track the following:
- Budget variance, which is the difference between what you planned to receive/spend and what actually happened. This can help lower debt by identifying areas where you can save money.
- Accounts receivable turnover rate, which is how quickly customers pay their invoices. You want to get paid as quickly as possible so your business doesn’t have to take on additional debt.
- CCC (cash conversion cycle), which is the amount of time business owners take to convert their assets into cash. This can help business owners anticipate when they will need to take on additional debt or liquidate assets in order to cover expenses.
If your goal is to improve customer relationships, track the following:
- Net Promoter Score, which is a measure of customer loyalty. Knowing how loyal your customers are can help business owners prioritize their efforts to improve customer relationships.
- CAC (customer acquisition cost), which is the cost of acquiring a new customer. This can help business owners understand how much they need to invest in marketing activities to acquire more customers.
- Customer effort score, which is a measure of how easy it is for customers to do business with you. This can help business owners identify areas where they need to make improvements to improve the customer experience.
Check-in on Your Metrics Regularly
One key aspect of connecting your data to your goals is regularly checking in on your metrics.
By monitoring your progress and tracking key indicators, you can see how well you are progressing toward achieving your goals. This can also help you identify any areas that need improvement.
It’s important to set aside time on a regular basis, such as weekly or monthly, to review your metrics so you can stay on track and make any necessary adjustments to your approach to achieve your goals.
Work With a Trusted Accounting Partner
Connecting your data to your goals is essential to successful business planning. Using data to inform your decision-making, you can make more strategic and informed choices to help your business succeed.
To ensure that you have access to the right data and expertise, working with a trusted accounting partner is important.
At Shetland Financial, our team of experienced professionals can provide valuable insights and guidance based on their expertise, helping you to make the most of your data and achieve your business goals. Contact us today to learn more about how we can support your business planning efforts.