It’s hard to win if you don’t keep score. This is especially true if you are mired in details and can’t see the forest from the trees.
I like simple systems that I will use regularly to create clarity and decision making. Thus, if you are managing multiple ventures, try creating your own dashboard. A Google Sheet is the simplest tool to manipulate. Keep an Enterprise Dashboard starred and use it to know where you are at, what next move you will make as a stakeholder and have links to scorecards to dig down into KPI’s that matter to business results.
From the image above, here’s some elaboration:
- Companies: Itemize each venture that produces cash flow.
- MRR: List your current monthly recurring revenue. I am looking at SaaS, marketing agencies, professional services and subscription businesses, which are my preferences.
- MRE: List your monthly recurring expenses. I find that 80% of this will be labor. Pay close attention to your numbers here. Aim for a 3 to 1 ROI for every employee you hire as well as look at your revenue/employee number as a KPI. 20% tends to be operational systems such as software and rent.
- Operator: If you want to move to a higher valuation business, get an operator so you have a professionally managed business. If you are the operator, then your owner discretionary expense lowers valuation. Anyone buying your business will have to buy a job. If you put in an operator, you can move to a potential 2.5x profits to 4.5x profits, closely doubling valuation. Also, it forces discipline, systems and passivity.
- Execution Plan: This should be your long-term vision distilled down to your yearly, quarterly and weekly fixed goals and KPI’s. It’s the strategy which will become your viable roadmap to getting the outcomes you want over time. Consider keeping all of these strategic plans and tracking KPI’s on performance in one Google Sheet with various tabs you work from on a daily, weekly and quarterly basis in your operations and management.
- Next step: I like the question from The One Thing by Gary Keller, “What’s the one thing to make everything else easier or unnecessary?” Keep asking this question from the owner level and you can move the big rocks that creates leverage while your team executes on the task level. It’s a critical question so you are using your role as a founder or owner in the highest payoff area.
Frameworks are simply tools that get results in the chaos of driving business goals. This happens to be one way to tame the beast of business startup or growth phases.
If you would like a copy of this Google Sheet template or chat on how to implement this, feel free to contact me.