Here's a sampling of common critical numbers by company, industry, and sector. Use this list as a benchmark or tailor these numbers to suit your own needs.
- Start-up computer consulting and contracting company: cash flow! "We have a bulletin board in the kitchen where we post graphs of cash flow and accounts receivable. We update it pretty much daily."
- Production facility: ratio of shipments to budgeted sales. "If it's 100% or better, everybody knows it's going to be a good month."
- Software systems developer: billable time as a percentage of total time; billing points (the points in a project when the customer can be invoiced)
- Heavy-steel fabricator: gross margin per hour. "We're limited as to how many hours of work we can do in a month. So let's go after the projects that generate the most profit."
- Inbound 800-line caller service company: call abandonment rate; calls per paid hour. "That second number makes us manage our people better."
- Health spa: "Ours is a sales-driven industry. We watch the number of tours, the closing rate, and the daily sales."
- Pallet manufacturing company: cost of materials. "We can affect that in a lot of ways such as how well we buy, how well we manage our scrap. It runs about 55% of selling price, so that's where the big bang comes."
- Food retailer: sales per labor hour. "We try to focus on the numbers that people can control."
- Auto dealer: "We're very strong on customer satisfaction. We think that's what ultimately drives the bottom line."
- Photo processor: rework, which is a big factor in profitability. "Our rework numbers are posted and graphed weekly."
Copyright © 1999 Open-Book Management Inc.
Dec 11, 1999