I recently listened to a podcast with a veteran business investor and CEO who stated that growth is only possible when we measure and track the things that matter in our business. And just to be sure we creative business owners got the message, he followed up with “If you’re not willing to measure, you’re not willing to progress.”
Ouch!
That one hit me hard because me and metrics aren’t super-tight on a day-to-day basis if you know what I mean.
But just as I was about to write myself off as another number-phobic creative business owner, I realized I absolutely DO track key metrics. Just in my own way. And as one of my favorite business advisors recently shared with me, it almost doesn’t matter what you track initially as long as you track something. You’ll soon figure out what metrics give you insights into your business and which ones don’t (and therefore should be dropped or switched out).
So, for those of you who are reading this post because you’re invested in growing your creative business but aren’t psyched about (or in a position to hire someone who is) setting up and tracking analytics, here are 3 ways you can figure out what metrics you should be tracking to grow your creative business.
OK, before we jump into today’s tracking tips, let’s ask ourselves why we need to track key metrics in the first place. In short, numbers don’t lie (they also don’t judge BTW), they simply let you know where you are in relation to where you want to be.
Let me share an example. When I re-branded a few years ago, despite my much-improved new website, I experienced a precipitous dip in the number of introductory calls being booked in my calendar. Instead of panicking, I decided to simply investigate why. In comparing the new website with the old one, we realized the blog page (where my marketing was sending most traffic) was the only one without a photo, short description of what I do, and call to action. Duh! We fixed that, and the number of calls bounced back to where we expected them to be.
Now, that’s just one example of how measuring and tracking helps us make decisions that grow our business.
Let’s jump into a few others. Here are 3 suggestions for tracking what matters in your business:
1) Revenue
Since we’re talking about numbers, let’s talk about the one that drives your business. Your annual revenue goal. Do you want to bill $100K/year? 500K? A million? The number you land on will determine the kind of business model you create, your pricing structure, and the number of clients you need to reach that goal. All of which are things you can track and adjust.
Where to start: Pick a revenue goal for the upcoming 12 months. Now, this isn’t about picking a random huge number and hoping it manifests. You’ll need to take into account your expertise, capacity, and what the market will bear.
The number you land on should feel like a stretch but do-able. From here it’s easy to figure out what your monthly billings would need to be.
The next step is to measure your progress against this goal. The easiest way to do this is to review your billings each month (if you’re not already using a bookkeeping software, I’d highly recommend getting yourself set up as soon as possible). Not reaching your target monthly goal? That’s OK because you can apply that strategic creative brain of yours to the challenge. What could you do to move yourself closer to that goal? Maybe you could:
- Raise your rates
- Adopt a different compensation structure
- Up-level your target client profile
- Improve your sales and on-boarding process.
- Streamline your delivery process so you can achieve more in less time
You’ll soon get a sense of what works and therefore, what levers you need to pull to move your billings moving in the right direction (up!).
2) Clients
Another really helpful metric to track is the number of clients you serve (or have the capacity to serve) at any one time.
Knowing what kind of clients you want, how many you need, and at what price point, will help you figure out what numbers to track. For example, if you have a high-touch business where full capacity is 10-20 clients, simply tracking your introductory calls and conversion rate may suffice. If you’re in a business where you need lots and lots of customers to buy a relatively cheap product, the metrics you’ll need to track get a whole lot more complex and you’ll likely need an analytics person on board.
Where to start: Determine what kind of business you have, what the lifetime of a client is, and what they’re worth to you. This information will help inform what support and infrastructure you need to service those clients while remaining profitable.
3) Time
Anyone else ever been guilty of underestimating and over-delivering and giving your time and expertise away for free? I know I have! If over-delivering is your default position (and that’s OK, it comes from a good place), it’s time to look at how much time you’re really spending on your projects and assessing whether you’re charging enough for the value you bring to the table.
Where to start: Start tracking your time. This can be done with a time-tracking tool, or simply bringing more awareness to how and where you spend your time. Are your hours being compensated for? Are you wearing that hats of several people, yet only getting paid for one? Are your clients expecting more, while paying less? Once you have a clear sense of how you’re spending your time, you can address your role, scope and pricing much more objectively. Will it mean adjusting your pricing to be based upon value, not just time? Quite likely. What about setting boundaries and enforcing them? Definitely. This is all good. Because a fair exchange of your value for your client’s money makes for happy creatives and clients.
OK, now it’s your turn. What metrics do you already track? How are those metrics informing the decisions you’re making in your business? Still a little fuzzy on it? That’s OK, but what will you commit to tracking?
I’d love to hear more about where you are in your businesses’ growth! If the idea of having a thought-partner with industry experience brainstorming these questions with you appeals, we should chat. Click here to share a bit more about yourself and let’s talk!
