Almost every small business owner checks the same single number every week, which is what came in. It is the most obvious number and the least useful, because by the time it moves the cause is a month behind you.
Four others take ten minutes together and each of them is a leading indicator rather than a rear view mirror.
- 1Utilisation:
The share of your available hours that were actually sold. Not booked, sold, so cancellations and no shows come out.
This is the single most useful operating number in a service business. It tells you whether your problem is demand or pricing, and those have completely different solutions. A business at 55% utilisation does not have a pricing problem. A business at 92% has one and is denying it.
Watch it by day and by staff member rather than as one figure, because a healthy average often hides a dead Tuesday and a stylist who cannot take a breath.
- 1Rebooking rate:
The share of completed appointments that left with the next one booked. This is the number that predicts next month better than anything else on the list.
It moves quickly in response to a habit change, it varies enormously between people doing identical work and almost nobody measures it. If you track one new thing this year, track this.
- 1Average spend per visit:
Total takings divided by number of appointments. Simple, and it separates two things that look identical in the takings figure.
A good week can be more people or more per person. Those are different businesses heading in different directions. Rising visits with falling average spend means you are getting busier and poorer, which is the most common way for a service business to exhaust itself.
- 1New client return rate:
Of the first time clients you saw last month, what share have booked again? This is the honest measure of whether your acquisition is working.
Businesses obsess over how many new clients arrived and rarely ask how many stayed. If you are spending anything at all on being found, this number tells you whether that spend is building something or filling a bucket with a hole in it.
Give it a month or two to be meaningful and then track it as a trend rather than week to week.
- 1Cash position for the next fortnight:
Not profit. What is in the account, what is due out before the next payday and what is genuinely due in.
Three lines, ten minutes and it is the number that stops a good month becoming a frightening one. Profit is a quarterly conversation with your accountant. Cash is a weekly conversation with yourself.
What to do with them
Write the five down in the same place every Monday. A notebook is fine. The value is not in the sophistication, it is in having a series, because a single week's utilisation means nothing and eight weeks of it means everything.
Then pick one to work on for a quarter and leave the others alone. Trying to move all five at once moves none of them, and the one worth picking is usually rebooking rate, because it is the cheapest to change and it lifts three of the other four on its own.
The numbers not to bother with weekly
Followers, likes, page views and total client count. All of them go up over time regardless of whether the business is getting better, which is exactly why they are comforting and exactly why they are useless.
Topics
Keep reading
- Bookings
Where double bookings actually come from
A double booking is almost never a mistake somebody made. It is a gap between two systems that both think they own the diary.
- Bookings
Should you still take walk-ins?
Appointment only is cleaner, quieter and easier to staff. It also turns away the customer standing in front of you with cash in their hand. A middle path usually wins.
- Payments
Should you still take cash?
Cash has no processing fee, which is the argument everybody makes. It also has a banking cost, a counting cost and a record keeping cost that nobody puts a number on.