You will be able to choose leading indicators you can act on each week and lagging results you review each month.
Sales figures are accurate, but they come in after the period they describe has ended, so they can't help you change it. To steer a business while you still have time to change course, you need three things: numbers that move earlier, goals you can check on a fixed date, and a short list of numbers you actually look at.
Revenue, profit, new customers, repeat orders and students enrolled for the term all report something that has already happened. Each one is a lagging number, which means it reports a result after the event. These are the results your business exists to produce. The goal you wrote in lesson 6.1 was stated in lagging numbers.
The weakness of lagging numbers is timing. You can only count a month's revenue once the month has ended. At that point the figure can tell you the month went badly. It can't tell you which part of the work let you down, and nothing can be done about that month now.
Take Mei Ling, who runs a bakery. When March ends, she goes through the quarter's sales and finds they came in below the previous quarter. She wants to find the cause and put it right. The quarter has closed, though, and the orders she lost in January can't be recovered.
So use lagging numbers to review your plan, and use other numbers to steer. Every month or quarter, compare your lagging numbers with your goal and ask what they tell you about the plan overall.
A leading number moves before the result does, and you can influence it within the week. Common ones are enquiries, trial classes booked, quotes sent, sign-ups to an email or WhatsApp list, visits to an order page and calls from a Google listing. Each one counts a step a customer takes on the way to buying. Those steps happen first, so a change in them gives you early warning.
Imagine Mei Ling had noticed that her enquiries fell by half in the first two weeks of January (also invented). She would have had time to act before January's sales were counted. She could have checked that her Google listing still showed the correct opening hours, sent a broadcast to her past customers, or put her Chinese New Year menu up earlier than planned.
Test any leading number in two ways. It should come earlier in the customer journey than the result, and you should have some way of changing it. Enquiries meet both tests. Weather fails the second one: it may track your sales closely, but you can't change it.
The channel numbers you set in lesson 6.1 are leading numbers. You picked them so you could see each week whether a channel was on course, well before you know term enrolment.
A goal is only useful if, on a particular day, you can tell whether you met it. "Get more orders" can't be checked, because it doesn't say more than what, by when, or counted how. Write your goal so it names the number, the amount and the date. When that date comes, the answer is either yes or no.
For Mei Ling, one goal could be 60 custom cake orders from April to June, checked on 30 June. Another could be 25 enquiries a month through her WhatsApp catalogue, checked at the end of each month (both invented figures).
Many people write goals against the SMART checklist: specific, measurable, achievable, relevant and time-bound. You don't need to memorise it. Of its five parts, specific and time-bound give people the most trouble. A loose goal with no date feels comfortable, because nobody can say you fell short of it.
To pick the amount, start from your own past results and add a stretch you can justify. Mei Ling took 45 orders last quarter (an invented figure). She can aim for 60 only if she can name what will bring in the extra orders, such as a new channel or a new partnership. Take the figures for your goal from your own records, not from Mei Ling's.
When you write a goal, name the number first. Then name the amount, based on your past results plus a stretch you can explain. Then name the date you will check it. If the amount is higher than before, be ready to give the reason.
Apps offer reach, impressions, profile visits, link clicks, saves, shares, open rates and follower growth, and it's tempting to track all of them. A dashboard can hold dozens of figures that each move a little every day, and with that many the one that matters gets lost. Your weekly check becomes a scroll through charts where nothing stands out, and you finish knowing nothing new.
For most small businesses, three to five numbers in total is enough. That means a few leading numbers you check weekly and one or two lagging numbers you review monthly.
Give each number a named source so you know exactly where to look. Where a number comes from deserves as much thought as which number you pick. If you have to piece a figure together from memory every Friday, you will have stopped checking it by the third week. Where you can, choose numbers that a tool, a chat list or an order book already records. If a number has no source, set up a way to record it or swap it for one that has a source.
Mei Ling sells through two channels, WhatsApp and her Google Business Profile, and she also sends a monthly broadcast to past customers. She tracks four numbers, three leading and one lagging:
new enquiries through WhatsApp, checked weekly from her chat list (leading) the number of times people tapped the call button on her Google Business Profile, checked weekly from the listing's own statistics, which count this only when the profile shows a phone number (leading) past customers who reply to her monthly broadcast, checked weekly from the broadcast replies (leading) confirmed orders, reviewed monthly from her order book (lagging)
Each leading number belongs to one of her two channels, and all three lead towards confirmed orders. If confirmed orders drop, she looks at the three leading numbers to find which channel slipped.
Start with leading numbers that come before your result and that you can change. Add one or two lagging numbers that match your goal, and keep the whole set between three and five. Write a source next to each one. Where you can, use a source that a tool, a chat list or an order book already records. If a number has no source, set up a way to record it or replace it.
Check the leading numbers every week. Each month or quarter, compare the lagging numbers with your goal. If a lagging number falls, look at the leading numbers to see which channel slipped.
In the activity below, choose your own three leading numbers and one lagging number. For each, write the place you will read it from. If you can't name a source, that number isn't ready yet, and you should either find a way to record it or pick a different one.
Choose three leading numbers and one lagging number for your plan. Next to each one, write where you will get it from.
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