After getting a sneak peek behind the scenes of hundreds of businesses over the years, I've learned a thing or two about what makes a business healthy, and I know that what you see on the outside of a business isn't always an accurate reflection of what's going on inside. Now, I'm not talking about those who are intentionally misleading others.

I can do an entirely another episode all about ethics and integrity. What I'm talking about today is whether you're focused on the right success metrics yourself and whether you are actually believing that your business is healthy based on the right metrics. Some people think they have a healthy, thriving, growing business when in fact is quite the opposite.

Sometimes this is due to just ignoring metrics altogether, and sometimes this is due to focusing on the wrong metrics. If you're not paying attention to your financial data or other key performance indicators and you're listening to this, then first I just wanna say it's time. Yes, you.

If you're even thinking about scaling a business, then tracking, analyzing, and optimizing your business based on data is now a part of your responsibility. Congratulations, you just got promoted and have some more responsibilities now. Seriously, when you start looking at numbers, it's a game changer as long as you're looking at the right numbers.

And so I wanna talk about that because when you look at numbers, especially early on, but long term, even I've, I've had many clients, even my corporate days, who would focus on metrics that were vanity metrics. Now, vanity metrics are metrics that create a positive perception. Especially for others, but they do not lead to a better understanding or better decision making for your future for the business's future.

Bottom line growth doesn't always equal success. Sometimes you can look at numbers that are growing, but they're simply vanity metrics and. No matter how much they grow, it doesn't actually mean that the business is healthy. It doesn't mean that the business is profitable. Let me give you some examples.

I've had clients before who were very hyper-focused on number of followers and engagement, and they would get all worked up whenever they weren't seeing those two numbers growing. But at the end of the day, what really matters? Comes back to leads and sales. At the end of the day, it truly comes back to much more than how many people are following you and engaging on social posts.

All of those social metrics are fun, and sure they're an indication they show some progress, but that's not the end all be all. And oftentimes you can close a sale. Without someone ever engaging with you. So those aren't true metrics of success. They're not reliable. Oftentimes, again, those are more vanity metrics.

You could have a huge following and no cells on the backend. Second, another area that even I sometimes with my ops background get focused on is. Projects and completing tasks, checking the box, getting things done, versus the results that they're creating. Now, I take an approach where I like to look at the result first, that we want to go after the goal and then break that down.

But the danger in that is when you get so wrapped up, especially talking to your team about what's getting done and just checking in. On whether those tasks and projects are completed versus leading them based on results. Now, that's a lesson that I had to learn the hard way, and I'm so glad that I did.

But it's an easy way to really focus on, again, a. A measure of success that's all about vanity, just number of things getting done, number of projects opened and started and completed, versus the real results that they're creating. It's very easy for vanity's sake to be able to say, we've got a lot going on.

We're really busy, versus looking at what's actually being created from that work. The third, and this is a big one, is revenue versus profit. A lot of people really focus on driving more revenue, and I myself talk about revenue. We're talking about scaling to seven figures after all, but that isn't the end game.

There is so much more that you have to focus on, and so. When you're looking at revenue alone, you can't get wrapped up in what those numbers are, revenue alone, because you also have to factor in profit. I have had clients on both ends of the spectrum, revenue-wise, multiple seven figures and multiple six figures, and serving both of those clients at the very same time.

I was able to compare. Looking at the data, I would say hands down, the $300,000 business was healthier than the $2 million business. It was absolutely obvious. Once I was in the back end of the business and looking at what was really going on, now not everyone gets the opportunity to do that. And so you hear someone talking about revenue, you hear them talking about the big picture and hearing someone say that they crossed seven figures and they.

Maybe have made a couple million or even eight figures, that's all fine and good as long as the profit margin is there as well. You'd be surprised how many business owners are operating a seven figure business and have no profit at the end of the year. It's a loss compared to clients who really started with the principles that I teach them early in their business.

Have a much higher profit margin and metrics that they can measure to show that they really, truly are on track to not just have a healthy business today, but to begin to scale that business and maintain that same level of health. So what should you focus on? That's the question. I have a list of all of the metrics that you could focus on.

Department by department and to help you set up an overall company dashboard for you as a, as the leader, as the CEO, so that you don't have to get involved in all of the numbers because you want to be able to glance at one scorecard and see how your business is performing. While there are so many metrics you could look at, depending on your business model and goals, I'd recommend that you just choose a handful and those are gonna be custom to you.

If you were trapped on a deserted island with no way to leave, but you could have one piece of paper delivered each week with the key performance indicators to let you know how the business is doing, which numbers would you choose? Those are the numbers you need to focus on. Those are the numbers that you need to put your time and attention towards.

The reality is that what you focus on grows. So what you measure, what you talk about with your team, what you hold them accountable to, that's what will grow. So once you choose a handful of numbers, you're going to want to double check that they aren't vanity metrics. And you can do that by asking these three questions.

Can you directly influence the number and repeat success? Are you in control of that number? In other words, you or your team, do you know exactly what lever to pull to increase that number or to slow down that number if you need to? And is that repeatable? That's the first question. Second question, can you use the metric to make real business decisions If you can't, that doesn't belong?

On your high level scorecard, maybe your marketing team wants to track how many followers you have, but that doesn't really matter at the end of the day to you as a CEO. Can you make real business decisions based on the data that you're looking at? Third, does it reflect what's really happening behind the scenes?

You know how your business is doing. So if on paper. You're crafting a story with certain metrics and it feels good. It looks good, but you know that that's not really what's going on. You might need to look at some different numbers. You might not have the right metrics to really focus on where your business needs to improve.