Libman Tax - May 2019

LI BMAN 'S AWESOME LETTER

LIBMAN TAX STRATEGIES

MAY 2019

A Break From the Chaos Means It's Time to Examine Some Metrics

I don’t want to jinx myself, but I’m going to say it anyway: Tax season is officially over. Thank you to all my awesome clients, both new and returning, for working with me through this chaotic time. A massive thank-you also goes to my family for holding down the fort while I withered away in my office for the last several months. Now that I have a little more free time on my hands, I intend to get them dirty with some home projects, much to Maria’s dismay. In addition to further breaking several already- broken household items, I also use this time to evaluate the business’s performance during the previous quarter. Because Libman Tax Strategies primarily revolves around seasonal demand, the majority of our cash flow is derived in three months, which leaves me ample opportunity during the remaining nine to reflect on the business and how everything is going. The following are a few of the metrics I look at every quarter but spend more time on in May. In fact, these are metrics that a business owner of any kind of company should consider. 1. NUMBER OF NEW CLIENTS While this number might seem fairly easy to determine initially, there is a lot that goes into adding a new client to your database. For example, no matter how many new clients you brought in during a single quarter, you have to compare that with the number of dollars

you spent on advertising to get an average cost of acquisition. You also have to determine how many of your new clients came from referral sources and take that into consideration, as well. 2. YEAR-TO-YEAR GROWTH-RATE COMPARISON How much do you grow from year to year? How long does it take to get a product out the door? For my operations, I examine how long it takes me to get a tax return back to a client. 3. EMPLOYEE PERFORMANCE For this metric, you might consider the following questions: What was the average wait time for a client in the office? How many complaints did you get, and how quickly did you resolve them? You also need to examine billable hours versus nonbillable hours and income production per hourly basis. 4. EXAMINE CRITICISMS This might be the least-fun metric to analyze, but it's also probably the most important. You need to dive deep into the reasons that previous clients left. While there may be a variety of factors, it usually all boils down to one overarching reason: When we fail, we get fired. It’s important to follow up with the clients who left and see what you did wrong in order to correct it. Truthfully, the people who are most pissed off at you give you the best advice. People who like you won’t give you the truth, but people who are upset will be very specific in their criticisms. Think about it. Have you ever ended a relationship and had your ex-boyfriend or ex-girlfriend give you a laundry list of all your shortcomings? I know that when I frustrate Maria, she can come up with enough of my deficiencies to cover at least 15 pages. Exploring these criticisms might be difficult, but it’s a valuable part of the human experience. We shouldn’t shy away from what we do poorly or what we do positively; both should hold equal weight. Lastly, if you don’t have a way to track any of these metrics, get some systems implemented sooner rather than later. Knowing these numbers is the best way to know whether you’re growing or remaining stagnant.

"In addition to further breaking several already-broken household items, I also use this time to evaluate the business’s performance during the previous quarter."

-Adam Libman

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