What is Your Business Batting Average?


December 13, 2013

I love baseball.  I love business.  And there is an incredible relationship between the importance of numbers in both.


I am fascinated by the numbers in baseball that I grew up with and am growing old with.  714, 755, 2130, 4256, 4190, 56, .406, 511, 60, 61, .200 – the Mendoza line.  All of these and many more conjure incredible memories of my life.  They also stir the imagination of comparing numbers across the generations.  The numbers tell the story/stories of so many years and careers.  Numbers tell the story/stories of businesses too.


I am truly amazed at how many business owners and managers are clueless when it comes to numbers.  Over the past year alone, I have met many business owners that have no idea what there break even point is.  Some/many have no idea what their sales are, or their profits, their average dollar sale, their gross margin, their leads, where their leads come from, or even their conversion rate.  Many business owners, managers, sales people simply get caught up in the day to day and do not keep score.  This is also a major reason why all business owners need business coaches.


Recently, I was working with a client who gave me his monthly P&L and was upset with his results.  After analyzing the results I told him, do you realize you had a 16% increase in sales last month, yes 16% in this economy, and that almost all of his key numbers were much improved over the same period last year.  He was shocked.  He, like many others simply do not read, analyze or understand the numbers.  Another client knew/felt she was up in sales to LY, but became thrilled when I did the math and showed her that she is running a double digit increase YTD.  A couple of months ago, I was talking to a prospect who conveyed that she did a good job of finding out where here customers came from.  During the conversation she communicated that she was using television, radio, networking, brochures, and several other vehicles to drive customer traffic.  She then told me that she was getting most of her business from referrals, probably the best and one of the least expensive marketing strategies.  Hearing this, I asked a logical question, knowing that television advertising is very expensive, how much of her business was coming from television.  She told me she was embarrassed to say that she did not know.  She was gathering the information, but was not taking the time to analyze the results and make the appropriate decisions based on the information.  She simply did not know how to keep score.


Getting back to the comparison of business to baseball, look at how you keep score.  Your leads are like your at bats.  Your conversion rate is your batting average. Your sales are your wins. Your average transaction is equivalent to your slugging percentage.  Your gross margin or profit margin can be compared to your win loss percentage.  And the break even in your business could easily be the Mendoza line – although if you live at the Mendoza line you will not stay in business very long and certainly will not enjoy the journey.


So, what is your business batting average?