- THE MAGAZINE
If I asked you how your business was going, what would your response be? “Great”? “Okay”? “Not so good”? And by the way, how did you come up with your answer?
November 2 of this year will mark the 25th anniversary of my carpet cleaning business. I started my business from the trunk of my car in 1984. Since then I have added trucks and employees, bought businesses, purchased real estate, and had lots of success in business.
But I have also made many mistakes, some more than once!
Success is different for every single person in business. People have different goals in life, different interests, different circumstances.
However, there are three things we can use to measure the success of any business.
The First ThingThe first thing that “matters” is that your business is helping you achieve your “life goals,” that is, what you want your life to be about. Not just your lifestyle, such as how much money you want to make, what kind of house you want to live in, and what kind of car you want to drive, but the whole package.
World-famous personal development leader Zig Ziglar teaches that there are seven spokes on the “Wheel of Life,” and that success is a balanced life.
I think everyone would agree that if you are reasonably successful in the seven areas on the Wheel (Spiritual, Family, Personal, Mental, Career, Financial, Physical) that you would be reaching your life goals.
The only reason your business exists is to help you achieve your life goals – to have a fulfilled life – and help you along the right path in life, moving forward with your goals whatever they may be.
You went into business so that you could be your own boss, to chart your own course, to have a little more free time. Sadly, for most it has turned out to be a 24-hour, 7-day-a-week “J-O-B” that steals time away from your family and the other things you want to do.
This is because your business is out of balance. You have most likely made the mistake that most business owners make: you see yourself as working for the business instead of the business working for you.
As soon as you turn that around, your business and life will begin to change. Think about your life and how you want it to be, and you can design your business any way you want.
You may not realize that yet, but once you learn the skill of working “on” the business and designing it around your life, you can design it any way you want.
The Second ThingThe second thing that matters in your business is that you make a profit. If your business isn’t making a profit, and you aren’t reaching your life goals, you are unhappy and broke.
Not a good place to be!
If you are living your dream but your business isn’t making a profit, it will turn into a nightmare before too long. And if you are making a ton of money, but you aren’t happy, what’s the point?
The “golden key” to business success is knowing and moving your numbers. I have seen cleaners who don’t feel like they are making progress, but when we compare numbers from last year to this year, we see progress and they feel better because they can see the results. This gives them inspiration.
By the same token, others “feel” they are doing great, but can’t figure out why there isn’t any money in the bank. Once they face reality, they may feel desperation at first, but they can then turn to inspiration, because once you start tracking your numbers, you can pinpoint the actual areas that need to be improved.
Here are the key numbers you should be looking at on a regular basis:
- Profit and Loss (PNL) or “Income Statement” – How much money you made (or not)
- Balance Sheet – (What your company is worth)
- Sales by Service Category – (such as carpet cleaning, upholstery cleaning, restoration, etc.)
- Sales Closing Rate – (How many calls came in and how many were sold)
- Pricing Analysis – (Are you charging enough?)
- Marketing / Advertising Results – (What is your return on investment?)
- Hourly Production Rates – (How much do you bill per hour on average)
The Third ThingThe third thing that matters is that you are giving your clients and employees a “fair shake.” If you aren’t giving your clients a good value for the money they invest with you, it will eventually stop working.
If you have employees and vendors you work with, you need to create a win-win for them as well. We rely on other people for our success and the better value you give, the more successful you can be.
One of my favorite definitions of success is “Success is making a difference in the lives of others. Happiness is watching them grow because of it.”
But if you serve others at below profit in your business, you may not be able to serve them at all in the future.
On the other hand, you could be “living it up” and making tons of money, but if you are using those around you, you aren’t living a balanced life and your problems will catch up with you.
Stop being a slave to the business out of fear and obligation and get focused on your purpose in life. Get diligent about your finances so you can have more options, and live your life every day to make a difference in the lives of others.
If you do those three things, you will truly be a phenomenal success!