Running a successful business is no fly-by-the-seat-of-your-pants endeavor, and while you may have gotten along fine so far, both data and best business practices agree — you need to track and manage your business.
What does “track” mean? In a business context, it means to record with accuracy and analyze thoroughly. Why track? Simply put, to stop surviving and start thriving. “Managing” implies taking it to the next level — not only seeing an accurate picture of your business, but taking the necessary action to implement better practices and processes.
The Harvard Business Review cited a study by AffinityLive, which found that of 500 workers surveyed, each person lost $50,000 per year in revenue due to insufficient tracking of emails — and that’s only emails!
Accurate, efficient tracking and management is the defining difference between a reactive business and proactive business. Reactive businesses can only deal with the task and situation at hand. But, proactive businesses know exactly how their resources have been spent in the past — and they’re able to forecast the future of their business and act accordingly.
Clearly, everyone wants to be part of a proactive business — and proactive businesses are businesses that have mastered tracking and managing.
Here are four areas, often overlooked in small- to medium-sized businesses, in which tracking and management is crucial to growth.
Time may be the most overlooked, underutilized and mismanaged resource in business. Easy, efficient and consistent time-tracking can mean worlds of difference for team members’ productivity and a business’ profit.
With inaccurate, inefficient or even nonexistent time tracking, you’ll never get a real picture of how many hours and employees it takes to complete a project.
For example, let’s say you’re a construction firm using spreadsheets to track time. Let’s also say your employees tally up their hours at the end of the week. This results in a lot of guesstimating because not only do your employees lack an efficient and user-friendly time-tracking tool, they’re waiting until the end of the week to log hours — which means they’re more likely to forget how they spent their time and make mistakes on their timesheet. (The same study by AffinityLive found that people who filled out timesheets once a day reported being more accurate in their record-keeping than those who filled them out once a week or less frequently.)
As a business, you’ll never have an accurate look into how many hours and how much manpower it took to complete a project. You’ll have trouble forecasting future project costs because the overall time needed will appear to vary significantly — even between similar projects.
Efficient, accurate time tracking would eliminate this issue, as managers could compare actual project hours and costs. Addressing this need is how time tracking software company ClockShark began. The company provides GPS time tracking app for mobile workforces, eliminating the need for cumbersome paper timesheets.
Tracking results is something that many business may assume they’re doing, but are actually completely overlooking.
Sure, you spent money on marketing initiatives, but did they actually work? You launched a product campaign, but did you see sufficient ROI?
It may seem like a basic part of business, but so many companies spend money without properly setting up the necessary metrics to see that money make an impact. And the result of not tracking results? Your team is left shooting in the dark, trying to make strategic decisions without ever knowing if their efforts are working.
Coincidentally, tracking results affects tracking time — accurate tracking of both can answer some of those crucial questions, like:
- “When we spent more time on certain initiatives, did we see better gains?”
- “Are we wasting time in an area that’s not yielding the success we need?”
- “Could we see more sales if we invested more of our team’s time in area A, B or C?”
When it comes to both time and results, tracking is not only crucial to monetary success, but also necessary for keeping morale up. Your team may think they’re working harder and longer with a purpose, but they might actually be burning time, energy and money. Tracking time and results offers clarity, and managing offers a chance for teams to reorient their priorities.
If your business deals with inventory, there’s no other way to say this: you cannot make strategic decisions for growth without tracking and managing your inventory.
If your business is constantly dealing with stockouts and backorders, there’s probably room for improvement within your inventory system. Deep down, you probably already know it’s true — waiting until a product runs out to restock isn’t positioning you for better sales and future success.
Good inventory tracking and managing will allow you to see your hottest products and plan for future sales. Tracking will also help you identify peak seasons for certain items. Managing inventory provides invaluable visibility into your business — and efficient and easy management makes getting this visibility painless.
With your inventory tracked and managed, you can see what’s in stock at every location and know how much you’re making. You can set up accurate reorder points, and sleep better knowing the customer service team won’t have to scramble during yet another stockout.
Additionally, managing current inventory will help you make strategic decisions for what kind of products you want to continue, discontinue or potentially branch out into. Managing inventory gives you insight into the mind of your customer, and is absolutely key for future product decisions.
If you can’t answer simple questions related to your sales, you’re probably not using the right metrics to track them.
Let’s say you know for certain that sales were up this year over the last three — do you know more beyond that? What were the sources of most of your leads? What’s your average conversion rate? How many sales will you need next year to continue growing? Most companies’ business comes from returning customers — is this the case for your company? Good tracking can answer all of these questions.
Much like tracking time, results and inventory, tracking your sales by certain metrics (like lead source, activities, product lines) helps you avoid dumping huge amounts of effort into areas that aren’t yielding profit.
While you may be able to avoid tracking sales for a week, month or even a year, long-term sales tracking and managing is a necessary component for targeted growth.
Track, analyze, and manage — but do it right
There are several other areas of your business you can track in order to grow. You don’t have to track and manage everything, but you do need to crack down on the right areas. And, like all good things, you have to do it well. Using carefully chosen metrics and allocating time for analyzing company patterns and history needs to be balanced with efficiency and increasing productivity.
What are some areas you’re currently tracking and managing in your business? How do you plan to use that data for future growth?