My second business, MedCenter, was in a ferociously competitive industry. In order to survive we had to watch our numbers like a hawk. And good thing we did, because otherwise we would have missed two big issues that would have seriously hurt us.
MedCenter was complicated with lots of moving parts. But we were able to manage it – and improve it significantly – with just 4 numbers. They’re the same four numbers that ANY business can use. These numbers make up the Business Model.
[Watch the video above to see how we used MedCenter’s business model to improve it.]
The Business Model shows us how well our business makes money. It helps us improve our business by showing our progress in these three areas:
- Our sales and marketing effectiveness.
- The revenue we generate from each customer.
- How efficient we are at producing and delivering our products and services.
Sure, these numbers are already embedded in our Income Statement. But the Income Statement has too many numbers and lacks the focus we want. Also, many business owners feel uncomfortable sharing the Income Statement with their staff. Which makes it difficult to create shared goals.
The Business Model’s power comes from its simplicity AND because the financial information is presented in a way that can be freely shared with everyone on your team. Now you can create a shared focus on these three critical areas:
- How much does it cost us to get a new customer?
- How much do our customers spend in their lifetime with us?
- How much does it cost to build and deliver our products and services?
Are you concerned about these areas in your business? Then watch the video above, get the free Business Model worksheet*, and start tracking – and improving – your business model every month.
* Get the free worksheet at BusinessPRO.tv. Scroll to the bottom and get Episode 4’s resources.