Michael Gerber's Business Development Process Foundation #2: Quantification

Quantification is the process of measurement by numbers. You quantify sales by representing it by a number. $3.5 million. If it goes up to $3.6 million over the year, you've had a $100,000 increase. You've quantified your sales increase.
Gerber, p. 122-4, says:

On its own, Innovation leads nowhere. To be at all effective, all Innovations need to be quantified. Without Quantification, how would you know whether the innovation worked?

By Quantification, I'm talking about the numbers related to the impact an Innovation makes...

Begin by quantifying everything related to how you do business.

I mean everything...

You'll become as familiar with your business's numbers as your doctor is with your blood pressure and pulse rates.

Because without the numbers you can't possibly know where you are, let alone where you're going. With the numbers, your business will take on a totally new meaning.

This is absolutely true. You have to measure everything. Look at everything you're doing. What's flowing from it? Do you see results?

Do experiments. Write down what you're going to do, the assumptions behind it, how it's going to be done. Then establish an evaluation period. I.e., "I'm going to do X for 18 months, then evaluate it. And do it, and keep records so you know whether it has worked or not.

And don't be afraid to try things. Don't be stupid, of course. I hired a woman once who was out of work because her employer had taken all his cash and gone to Atlantic City and gambled it all away and had to close the business. But do what seems sensible to you.

At the end of the 18 months, you may decide it's showing promise and keep doing it. You may decide that you don't have enough data yet and you want to let it go another year, then look at it again. Or you may determine it's a waste of time.

Of course if it's showing right away that what you've tried is a train wreck happening in slow motion, don't be afraid to stop right away.

So you're going to introduce a change, establish measurable objectives, then keep records and then quantify, at the end of the period, what it's accomplished.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know. And follow me on Twitter.com

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.