The E-Myth Mastery Program Business Quantification The E-Myth Mastery Program Business Quantification

General Reference General Reference

Business Development Process: GN-0040 Business Development Process: GN-0040
Page 2

2 Business Quantification Worksheet

Quantification, if you do it right, gives you a “sixth sense” about
your business. It’s not at all mysterious. It’s a logical, practical
process. And it’s a process you can comfortably manage because STEP 1 DESCRIPTION OF KEY BUSINESS INDICATORS:
it’s one based on your own needs, abilities, and preferences. Describe what is to be quantified and the units of measurement.
SOURCE AND TIMING:
So when the question is, “Do I quantify?” the automatic answer Identify the source of the measurement data, how it will be collected, and the frequency of
is “Yes!” And when the question is, “What do I quantify?” the collection (daily, hourly, continuously, weekly, etc.).
answer is “Everything.” ACCOUNTABILITY:
Indicate the name of the person or persons accountable for collecting the data.
Three Levels of Quantification:
STEP 2 PRIORITY:
Strategic, System, and Business Indicators After completing the list of items to be quantified, determine priorities and indicate the priority
ranking in priority column.
At the highest level of information, there’s strategic quantification.
You strategically quantified your business when you established STEP 3 REPORT NAME:
Indicate the management report where you think this indicator should appear and how
your key strategic indicators (refer to LD-0050, Key Strategic often the report should be produced.
Indicators). You should be reviewing your strategic indicators at
least quarterly. PRIORITY DESCRIPTION OF SOURCE AND ACCOUNTABILITY REPORT
KEY BUSINESS INDICATORS TIMING NAME
Strategic indicators give you a sense of your progress toward
your Strategic Objective, and they give you a feeling for the
general health of your business. They give you the “big
picture.” But they aren’t meant to help you navigate the day-to-
day management of your business, and they aren’t precise
enough to help you detect and diagnose
Key Strategic Indicators show
problems within your business.
how the business is progressing At the most detailed level of quantification,
toward its Strategic Objective
and indicate the general health there are key system indicators. Every time
of the business. you develop or innovate a business system,
you determine its key indicators and establish a
Key Business Indicators enable baseline against which to measure performance
the chief executive and senior and progress (refer to GN-0020, Systems
managers to monitor and man-
age the business and its major
Evaluation, and GN-0030, Systems
sectors as an integrated whole. Innovation). You, or your employees, should
be watching your systems indicators
Key System Indicators show continuously.
managers and employees at all
levels and in detail what is right Key system indicators are detailed and
and wrong with every system. precise. They’re the best way to detect
when something in your business is going
awry and what’s causing the problem. For
day-to-day and minute-to-minute management nothing beats key
system indicators for knowing exactly what’s happening within
any one system. But they don’t tell you about the business as a
whole or even significant portions of your business.
That’s what Key Business Indicators are for.

This document is confidential and proprietary to E-Myth Worldwide and cannot be used, disclosed or duplicated without the
prior written consent of E-Myth Worldwide. This is an unpublished work protected by federal copyright laws and no unau- This document is confidential and proprietary to E-Myth Worldwide and cannot be used, disclosed or duplicated without the prior written consent of E-Myth Worldwide. This is an unpub-
thorized copying, adaptation, distribution or display is permitted. lished work protected by federal copyright laws and no unauthorized copying, adaptation, distribution or display is permitted.
The E-Myth Mastery Program Business Quantification The E-Myth Mastery ProgramTM Page 1
General Reference General Reference
Business Development Process: GN-0040 Business Development Process:GN-0040

Business Quantification
Menu of Management Reports Looking at your business objectively
REPORT NAME AND TIMING:
Give the report an appropriate name. Indicate when the report will be delivered (frequency, date). If the
“It has been said that figures rule the world. Maybe. But I am sure that figures show us whether
report is not currently produced, indicate expected inception date. it is being ruled well or badly.
– Goethe, novelist and philosopher
DESCRIPTION:
Describe what is to be quantified and the units of measurement. Back to Basics – The Business Development Process
ACCOUNTABILITY:
Quantification is one of those habits that can become so basic you
Indicate the name of the person or persons accountable for creating and distributing the report.
do it without thinking. That’s good and bad. It’s good if the idea
DISTRIBUTION: of quantification is so ingrained that you automatically use it to
List the names of people to whom the report will be given. understand every part of your business. But it’s not so good if you
do it mindlessly, without carefully thinking through what you’re
quantifying and how it will tell you what you need to know.
REPORT NAME DESCRIPTION OF REPORT
ACCOUNTABILITY DISTRIBUTION Quantification isn’t an afterthought – it’s an indispensable part of
AND TIMING AND LIST OF ITEMS TO INCLUDE
the business development process of innovation, quantification,
and orchestration. Without quantification you don’t know if your
innovation has worked, and you lack the controls to orchestrate it
properly.

You Don’t Know Your Business Until You’ve Quantified It

All business owners can walk through their businesses, listen to
their employees, look at their business activities, and get a sense
of whether things are going well or poorly. Some do it better
than others, but all business owners do it.
It’s a valuable skill, but it’s not nearly enough.
If you haven’t quantified your business, you’re not objective
about it. You’re seeing it through a distorted lens no matter how
objective you try to be. Without quantification, you make
judgments based on what you personally see and hear, and that’s
both limiting and biased. Because your eyes and ears can’t see
everything, and they’re your eyes and ears and are, therefore,
attached to your personal biases and beliefs, your personal view
will always be distorted. Despite your best efforts, your
decisions will be based on misinformation.
But by creating an effective quantification process you can
pinpoint exactly what’s going on in your business, for better or
for worse. You can anticipate problems before they materialize.
You can know exactly which areas need your personal attention,
and which do not. You can be completely objective and
accurately informed. Your decisions will be sound because
they’ll be based on good information, not belief, not opinion,
and not on an incomplete view of the business.
This document is confidential and proprietary to E-Myth Worldwide and cannot be used, disclosed or duplicated without
This document is confidential and proprietary to E-Myth Worldwide and cannot be used, disclosed or duplicated without the prior written consent of E-Myth Worldwide. This is an unpub- the prior written consent of E-Myth Worldwide. This is an unpublished work protected by federal copyright laws and no
lished work protected by federal copyright laws and no unauthorized copying, adaptation, distribution or display is permitted. unauthorized copying, adaptation, distribution or display is permitted.
 MILESTONES
Quantification Planning Worksheet
X = Start report development
A = Quantification system designed
Example
B = Report design complete
C = Quantification system implemented
General Reference

D = First report produced & distributed 1995 TIME PERIODS 1996

REPORT NAME J F M A M J J A S O N D J F M A M J
The E-Myth Mastery Program

Production tracking report X A–B C D

Staffing report X A B C D
Customer tracking X A–B C D
Business Development Process: GN-0040

Sales/response report X A B C D
Advertising report X A–B C D
Administration/overhead analysis X–A B C D
lished work protected by federal copyright laws and no unauthorized copying, adaptation, distribution or display is permitted.
Business Quantification

This document is confidential and proprietary to E-Myth Worldwide and cannot be used, disclosed or duplicated without the prior written consent of E-Myth Worldwide. This is an unpub-