Subscribe
Share
Share
Embed
Welcome to Leading With Force — a podcast where seasoned entrepreneur Brian Force shares the invaluable lessons he's learned on his journey through this crazy, wonderful life. Having built several multimillion-dollar companies, Brian dives into the nuts and bolts of building successful teams, scaling businesses, and leading with passion and purpose.
Each episode offers practical tools to effectively cast your vision, build your team, boost productivity, and become the leader you were meant to be. Brian's mission is to inspire you to unlock the incredible power within yourself, achieve your goals, and make a meaningful impact on the world. Join us as we explore how to find your inner leader, empower others, and embrace your journey.
Let's talk some business stuff today. It's really just kind of on my mind.
I'm very fortunate to be surrounded by a lot of amazing entrepreneurs and business people all day. It's what my community is mostly made up of and what I've found when people are growing their businesses or trying to take them to another level, there's really two extremes that operators will [00:01:00] sort of end up at. facets of your success in business is the ability to measure your most important results and then make deliberate decisions regarding those outcomes. That's how you're going to grow. That's how you're going to operate responsibly. That's how you're going to take your business to the next level by understanding what is the most important thing that you can be doing in your business at any time and then measuring it.
What is the one thing in your business that when you hit that metric, everything else should fall into place?
We have a really wonderful community and I learned so much from them.
I also notice and observe a lot of things and I'm really fortunate to be in touch with a lot of people who are trying to grow their businesses or take them to another level, or they're just getting started and they have a really brilliant idea, but they're not exactly sure how to get it off the ground.
And I see two paths when it comes to measuring your results. there's one path that I see a lot in the initial startup phase, which is we don't really know what [00:02:00] results are the most important to measure.
We want to grow. We want to make money. Obviously, we want our company to get big, get insulated to really start to be healthy. But there are so many different things that we can measure, whether it's new clients, appointments, revenue, margin, net profit. There are a lot of different ways to measure your success.
And it's incredibly important to boil down. What is the one most important thing? And the opposite is also true.
I see a lot of business owners, a lot of entrepreneurs that are obsessed with metrics. They're obsessed with KPIs. They measure any and every little thing in the create bigger dashboards and bigger hot sheets and. Bigger graphics and charts, and they're measuring every tiny little data point inside their business.
As if they're trying to solve some enigma, like the da Vinci code to figure out how they're going to take their business to the next level. They're really overanalyzing the numbers and they're having trouble getting to the most important metric or metrics that they can [00:03:00] measure that really move their business forward.
There's a healthy middle ground and this is where we thrive. It's incredibly important to figure out what your scoreboard needs to look like whether you measure that on a monthly quarterly even weekly basis your scoreboard is comprised of the one or two most Meaningful metrics in your business those by which if all of your other metrics are being met These one or two should be met as well Because when we're trying to uncover the opportunities in our business, there's really never such thing as too much information.
What there is is a limit to how much information you can reasonably digest to make incrementally better decisions.
You could continue to hone in on metric after metric data point after data point, and really boil things down to their most granular roots. But at some point along the way, you had enough [00:04:00] information to make a really good decision and it isn't getting increasingly better the more information that you have. There's a point of diminishing returns on data. Also, data is fundamental to your business and making sure you're running a healthy operation.
So not looking at any of it, not knowing what you should be measuring at all is obviously just as bad, if not worse. You could be really busy and wonder why you're making no money whatsoever. We had a recent story in one of our businesses where we thought we were absolutely crushing it for about a 90 day stretch.
And it turns out we weren't really measuring the right metrics in our business. And we ended up about a hundred thousand dollars in the hole when we thought we were killing it the entire time. It was a newer venture for us. It was a vertical of one of our other businesses. We were still really learning the accounting side and how to future cast our success.
Turns out we should have been looking at entirely different KPIs revolving [00:05:00] gross margin and net profit rather than just jobs booked , and new revenue coming in.
And so we learned a really valuable lesson there about measuring the right KPIs. A lot of entrepreneurs don't measure really much of anything in their business, except how many new clients they may be taking on, which is a fantastic thing to know, but it's not necessarily the most important thing to know.
At the same time, some business people try to measure everything in their business as if it's going to give them an infinitely clearer picture, the more that they look at. But that's really not the case. You have to find that middle ground. And the way to do that is to create your scoreboard, those one or two metrics.
So how do we create that scoreboard? How do we find the most meaningful metrics in our business? That by which those being met, everything else should fall into place. The most effective place to start is to figure out what moves your business forward on a unit by unit basis. For example, one of our [00:06:00] companies is a property management company. We manage residential properties in our local area. And so what moves us forward on a unit by unit basis is the amount of doors that we're bringing in, in any specific period of time, the amount of new properties that we're bringing under management.
Now notice that's actually different than new clients. Because our average client has about five properties, but not all of them do. We have some institutional clients that have way more. We have some one off clients that just have a single door that they manage with us. our key performance indicator needs to be the amount of doors that we manage rather than the amount of clients.
Because the reality is, The fewer clients we actually have per door, meaning our ratio to clients per door actually has a lot of secondary implications in our business. It's the amount of approvals we need for certain things like repairs. It's the amount of conversations we need to have around rental rates and things like that.
It's the amount of service lift that we have in our business. If we have fewer clients to serve [00:07:00] with more doors per client, we can run a really, really, really efficient business. Whereas if we have more clients and fewer doors per client, that's actually a much heavier operational lift.
We don't actually have new clients brought in as our main scoreboard, KPI. It's new doors rather than new clients.
Now we do measure new clients. As a secondary KPI, and it may be something that we review bi annually or even yearly, or if we're just feeling like the business is getting really noisy, we might look at how many properties we've onboarded in the past quarter, as opposed to how many new clients we've brought on.
And if we realize that gap is getting too close and our ratio of clients to doors is getting a little bit compressed, that means that we need to start targeting investors and clients that have more doors. That's going to help us raise our efficiency in our business.
But our main scoreboard, our main KPI for growth Is how many new doors we've brought on rather than how many new clients [00:08:00] we've brought on. And it's a very, very important distinction that we make in our business.
Now, there are many facets to that specific business. There is the sales side, bringing in new business. And there's the operational side, the service side, which is actually taking care of our clients. So we have one other key performance indicator that we put on our scoreboard each month. And that's the percentage of processes.
that are getting completed on time. So we're very systematic in this business. Everything that we do in this business to serve our clients, we do inside of our software where we kick off a process, throws out a checklist. Our staff goes down that checklist piece by piece and make sure that we're doing everything that we need to, to really win that process and take great care of our clients.
And so as soon as that checklist gets activated inside our CRM, a clock starts. And every one of our processes should be completed by a certain time after it was activated. Our application process when we have a new [00:09:00] tenant applying for one of our homes, we want to make sure that that takes no longer than three business days to get them either approved or denied.
And so we have that measurement for every single one of our processes and our scoreboard for our operations team, their number is the percentage of processes. That get completed on time. And we know that we're really winning when 95 percent of our processes are being completed on time. When we dip below that, we've got to look at where our performance is at, where we're dropping the ball, where the bottlenecks are.
And we've got to go and make adjustments or have some hard conversations or get the team energized and get moving forward because we need to be at 95%. So you can see how when you measure those two key performance indicators. You get kind of the best of both sides of the business.
How many new doors are we bringing on and how fast are things getting done? If we're doing things on time and we're bringing in enough new doors, most of everything else should [00:10:00] fall into place. Now, are we going to be perfect every single time? Absolutely not. But if we're knocking out all of our processes on time, We're going to get a lot of feedback from our clients on how things are going.
We're going to be able to make in game adjustments. We're going to be able to act dynamically and on the fly. We're going to be able to take care of people, but where we really get into trouble is when things aren't happening quickly enough. We know that our staff is talented enough, good enough that when they do things on time, they're also going to do things right.
And so we care very deeply around the growth side, how many doors rather than how many clients we're bringing on. And on the client service side, we care how quickly we're getting our processes done. What percentage of processes are being completed according to our policies and procedures. When we win on both sides of the ball, We're winning the game.
So that's a really good example of what a scoreboard looks like. Now we can measure a million other things. We obviously measure revenue, profit expenses, [00:11:00] you know, gross margins, net, Marvin, like everything, right? All of those things are incredibly important. But if I walked into my office every single day.
And the TV that we had on the back wall that hosts the scoreboard had 15 different metrics on it that I was supposed to take equally seriously. I would have a lot of trouble deciphering what was going on in the business at any given time. I really appreciate walking in and having two numbers to look at.
How many new doors have we brought on in the past 30 days? And what percentage of our processes are being completed on time? Because I know when those two things are right, and those are above our threshold, I've got some latitude. I can work on new projects, I can explore new dynamics and new opportunities in the business, and everything that we expect out of ourselves, and our client service, and our growth is being taken care of.
And I also know when I walk into the office, and one of those numbers is off, I know exactly what I'm focusing on that day because until the scoreboard is right until we're winning the [00:12:00] game I have nothing else that's more important to me in the world and when you have too many metrics to look at you may not be able to always decipher the real story.
You may be looking at the wrong metric that doesn't really affect your growth or your service or your excellence in the way that you think it does. So you need to think deeply around how to boil down those KPIs to the most meaningful one or two and get really good at measuring those In rapid time and then you can start to review all the other KPIs on your regular cadence We review KPIs mostly quarterly everyone that has to do with financials and things like that Obviously we look at our monthly P& L when it comes to margin and things like that revenue We usually look at those on a quarterly basis And so obviously you can see how if I didn't know how many new doors we were bringing on, and I didn't know how many of our processes were getting completed on time, I would have a really bad grasp on whether or not we were a good company.
And you can also see if I was really worried about new doors, new clients, [00:13:00] new processes being completed on time, net revenue, margin, gross profit, expenses, everything all at once at the same time. I would have analysis paralysis all day because I wouldn't even know where to start. So if you don't already have this implemented in your business, this is a great action item to start right now. Slow things down for a day or two. Think very deeply around what your scoreboard looks like. How do you know whether or not you're winning the game? If you need help with this, check out Gino Wickman's traction.
Check out the EOS model. This is a fantastic way for entrepreneurs to operate their business according to a map and a template.
And lastly, your scoreboard needs to be visible. This is how you're going to rally your team. If you were a football team and there was no scoreboard, you'd probably lose track of the score pretty quickly. There's a lot going on. This is controlled chaos. This is some form of warfare on the football field.
That's why you have scoreboards to remind your team whether your [00:14:00] head or behind and it affects how you play the game So you've got to make sure that you and your team see your scoreboard every single day We have digital TVs in our office that just all they show is our scoreboard nothing else. They don't not hooked up to cable There's nothing else on there.
It's literally just Our place to display the score. So every time our team shows up in the morning for our morning meeting, we know what the score is and what we need to focus on that day. If you haven't implemented that in your business, go and take that action step this week.
Drop a comment below. Let me know how that worked for you. If you have questions on how to really find your most meaningful KPIs, drop a comment on that. I'd love to help you out. And I hope that you found meaning and utility in this and I'll see you next time.