“If you haven’t worked out the critical numbers that will determine the success of your business, then you are flying blind and won’t be as successful as you could be.”
“So what are the key numbers that will drive your business forward? Revenue, profit, staff numbers, store numbers? If you don’t know, you are not alone. But I cannot stress enough the incredible importance of numbers in your business.”
No, this is not a quote from an accountant but it is a key message from Alan Anderson, renowned human resources, management and franchising consultant, who has hosted Franchise Growth Workshops with us in the past.
Alan has been involved in successfully driving the growth of many major franchise brands and has worked with with former Brumby’s Bakeries Managing Director Michael Sherlock.
Working together, Alan and Michael transformed Brumby’s from an ailing set of shops into one of the largest bakery franchise systems in Australasia with more than 300 stores and a share price that rose from 56c to $3.40 in just three years before the business was sold to Retail Food Group for $46 million, just over a decade ago.
They chronicled the processes that led to the success of Brumby’s in their book ‘Jumpshift!: Shift Your Business in Hyper-Drive’ and have since worked with more than 100 Australian and international franchises across all sectors helping them to drive and achieve growth.
From their experience, Alan says it is crucial for franchisors to clearly identify and understand the critical numbers that will drive the future growth of their businesses. These numbers are the indicators of a flourishing or floundering business.
“The key numbers that drove the success of Brumby’s were customer count and average spend per customer,” he says. “Whenever I ask, people usually say they know they want to build their business, but they are not sure about the details around numbers.”
As well as pinpointing these two numbers that will drive future growth, it is also imperative to regularly measure and review them to ensure you are on the right path.
“If you are not measuring your critical numbers regularly, then you won’t really know how your business is travelling and you could miss opportunities or make misjudgments,” Alan says. “Discipline is crucial in knowing where you want to be, applying it, and regularly reviewing progress.”
One tool to manage this process is the ‘Dashboard’ concept where the key numbers of a business are prominently on display, just like a car dashboard. This promotes accountability right throughout an organisation – from franchisees and their staff, to field managers, and head office executives and support staff.
To gain maximum value from this transparency, the numbers displayed must be ‘real’ to the business, and not just a percentage written on an excel sheet. Make them real, out there proudly on display, and guiding the pathway to accelerated growth.
Another valuable tool is to encourage and nurture an ‘owner’s eye’ mentality that gets everyone in a business, whether they are making money on the frontline or saving money in the back office, to act and think like an owner. If everyone in a business keeps an ‘owner’s eye’ on the key numbers that will drive it forward, then the fast lane to growth and success will be just around the corner.