Know Your Numbers Before You Plan Your Next Move

Thank you, Jim.

It's a pleasure to be here.

So let's start here.

Many small business owners are busy running the day-to-day.

What is the risk of making decisions based on gut instinct instead of business data?

There's no doubt that there's value in experience and instinct.

But the challenge is that instincts are often based on what happened recently, also known as recency bias.

Not necessarily what is happening across the business as a whole.

Business data helps validate those assumptions, uncover trends that might otherwise go unnoticed.

For example, a restaurant owner might feel like weekends are their busiest days.

But when you look at the numbers, they may discover that weekday lunches generate higher revenue or that certain products are driving more sales than expected.

The most successful businesses combine experience with data.

The data helps remove some of that guesswork and gives owner greater confidence in decisions that they're making.

So, Deepthi, if a business owner could only track a handful of numbers, which metrics should they prioritize and why?

Excellent question.

If you ask any restaurant owner or any small business, the two key metrics are sales and labor cost as a percentage of sales.

But in total, there are five key areas, total sales and revenue trends, peak days and peak hours, top performing products and services, average transaction size, and as I mentioned, labor cost as a percentage of sales.

These metrics provide a strong foundation for understanding demand, customer behavior, and overall business performance.

The goal isn't to track every single metric available.

The goal is to focus on the numbers that directly influence decision-making.