Inc Query: What Do Your Customers See?

Determining what numbers you should be tracking, and other pressing business matters.

By Bo Burlingham |  @boburlingham   | 
 

Inc query

Struggling with design, figuring out the right numbers to monitor, and other pressing matters.

In the E-mailbox this month are queries about making sure your product looks the way you want it to look, figuring out the numbers to monitor in a small company, finding the right market niche, and responding to the loss of a key supplier.


Look and Feel
I own an industry trade publication, and I'm having problems with the editor I hired four months ago. She's an excellent worker, but I find I have to keep giving her the same instructions on the look of the magazine over and over again. Her tastes are, well, gaudy. She has a preference for purple boxes and outrageous comic fonts. After I design a story, she'll often redesign it, and I'll have to go in and redo the design right in front of her.

All this is terribly time-consuming. One consequence is that I wind up ignoring the business. Bills stack up. My credit and phone bills contain erroneous charges that I don't catch. Collections are too slow because I don't keep on top of my accounts receivable.

I've finally reached the point of telling my editor I can't be disturbed for four hours each morning while I concentrate on business issues. But I'm afraid of what she'll do to the design while I'm away. Do you have any suggestions? --Kevin


"I can honestly say I've made the same mistake that you're making," says Ari Weinzweig, the cofounder of the world-famous Zingerman's delicatessen, in Ann Arbor, Mich. "In our early days, we hired a woman to work behind the cheese counter who was an artist. Every morning she would set up the cheese case in what she considered to be a very 'artistic' way, which happened to be exactly the opposite of what works. I didn't want to offend her, so I'd wait until she'd left, and I'd redo it. She'd return in the morning and be very diligent about putting everything back the way she'd had it. Then I'd redo it again.

"That's not a great use of time or energy, and it didn't do a lot for employee morale. The problem was that I wasn't being clear about my expectations. Perhaps you aren't being clear either. You have an idea in your head about the look and feel of the business, and you get upset because your editor's designs don't fit in with it. But unless you define the look and feel, how can she know what you want?

"In a business, design is not a matter of artistic judgment. It's a matter of vision, of having clear expectations. A good design is one that's effective. To be effective, you need to begin with a clear and consistent look and feel that you convey through all of your work.

"That doesn't mean that you personally have to define the look and feel all by yourself. You can involve your editor in the process, but you need to take the lead in ensuring that there is agreement on whatever style the magazine is going to use. Here at Zingerman's we have a very specific look and feel that we've fleshed out and written down over the years, and a lot of people participated in defining it. Now we even teach seminars on it. Anyone who designs for us has to work within that look and feel.

"And don't worry that you'll hamper creativity by having rules. I used to think that, but it turns out that people are more creative working with clear guidelines than without them."


Number Crunching
I've reached a stage in my company's existence where I need to graduate from using two part-time accountants to having some sort of a full-time controller. As I get ready to make the change, I'm wondering what numbers I should be watching on a day-to-day basis. Cash, to be sure, but what else? Short- and long-term cash flow? I'm sure there are some basic rules about the kinds of numbers that small businesses need to track. What are they? --Gary


"Every business has its own critical numbers, Gary, and my guess is that you already know what yours are," says veteran entrepreneur and Street Smarts columnist Norm Brodsky. "When you build a business from scratch, you can't help but learn the patterns and relationships. How do you tell whether you're having a good week or a good month? What happens when your sales drop? How long does it take you to collect your receivables? Those are all simple, commonsense things.

"Your accountant should be helping you figure out the numbers you need to be looking at and then providing them to you on a regular basis. Every Monday morning, for example, I get a sheet that breaks down my delivery business into four categories. The sheet tells me exactly what happened the previous week in each category, including sales and driver costs, which is actually my cost of goods sold. From that, I know my gross profit both as a dollar figure and as a percentage. The sheet also has the comparable figures for the previous 28 weeks, for the same week last year, and for the past three years.

"So in 30 seconds I can see what's going on in every part of my delivery business. I get another sheet for the storage business, because I need to track a different set of numbers there, but the idea is the same. I want to see how we're doing now compared with the past, and I want to apply the past to the future.

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Read more:

  • Meet the New Masters of Cash Flow
  • When It's OK to Ignore Costs
  • Why You Should Pay More Taxes

    • Bo Burlingham

    Burlingham joined Inc. in 1983. An editor at large, he is the author of Small Giants: Companies That Choose to Be Great Instead of Big. The book was a finalist for the Financial Times/Goldman Sachs Business Book of the Year Award in 2006. Burlingham is also the co-author with Norm Brodsky of The Knack; and the co-author with Jack Stack of The Great Game of Business and A Stake in the Outcome.


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