Rethink your metrics to gain strategic insights
When you look one day to sell your company to a third party, they will look at your financial, customer and operational data to see what strategic insights they can gain. They will be looking for the opportunities and risks associated with owning your business. Prior to them doing this analysis, benefit yourself by doing that analysis years prior.
A common issue we find in working with new clients is they have become stale in terms of how they look at their business performance. We find they are looking at the right things but not perhaps in the right way and this is causing them to miss key strategic insights that could help build the net worth of their company. Ask yourself these questions about your key metrics:
- Do we look at performance metrics both in percentages AND in whole dollars or units?
- Do we look at our sales performance on a portfolio consolidated level AND by individual sku (each of our products or services)?
- Do we look at revenue dollars by products/services AND by units? Your dollars could be increasing or decreasing but your associated units or weights could be doing the opposite and this could be caused by a variety of reasons such as price changes.
- Do we look at revenue and profit performance of our product and service revenues by month AND at performance trends over multiple years?
- Do we look at our revenues by customer (by specific products and services they purchase) by month, by quarter AND over the course of multiple years to identify trends?
- When is the last time we reviewed our key metrics and updated the targets we’ve set for each?
If it’s been awhile since you evaluated the strategic insights you are getting from monitoring performance metrics, refresh them today. Doing so today will help you gain insights that can help you improve your business and get you ready to attract and excite a future acquirer to pay a premium for your company.
