Power Ratios to Start Tracking
The more data you have, the more productive your company can become. This in turn will increase the value and make your company more attractive. Here are some ratios which provide a different way to asses your business:
- Employees per Square Foot – By calculating the number of square feet of office space you rent and dividing it by the number of employees you have, you can judge how efficiently you have designated your space. Commercial real estate agents use a general rule of 175-250 square feet of usable office space per employee.
- Sales per Square Foot – By measuring your annual sales per square foot, you can get a sense of how efficiently you are translating your real estate into sales. Most industry associations have a benchmark which you can use to compare where you stand in relation to your competitors. With real estate usually a close second to payroll as the largest expense, more sales per square foot can translate into more profit.
- Revenues per Employee – Payroll is the number one expense for most businesses, which explains why maximizing your revenue per employee can translate quickly to the bottom line. The ratio can vary due to factors such as how people-dependent your company is and by industry.
- Customers per Account Manager – How many customers do you ask your account managers to manage? Some industries lend themselves to hundreds of accounts per manager and others require more intensive customer relationships. Finding the right balance for your company can be tricky. A suggestion to finding the right balance is to slowly increase the number of accounts per manager but be watchful for the first sign of a drop in customer satisfaction of sales.
- Prospects per Visitor – This ratio gauges how effectively the content of your website converts visitors to your site into sales prospects. The resulting data may lead to revisions in your content and actions items asking visitors to share their contact information. You can further examine the sources of the visitors to determine how people are finding your site and therefore where to concentrate your marketing efforts.
