Edition 193 – The Pits
The noise can be deafening, yet also exhilarating. The smells can be strong, yet also subtle. The passion is usually emphatic – there’s no in between there!
Last week, I made the trip to Mount Panorama in Bathurst to take in practice and qualifying for this year’s 1000km endurance race. From delightful spring weather, to rain and plummeting temperatures, I thoroughly enjoyed the three days that I was away to indulge in a passion I’ve had since I was a small boy.
One of the highlights for me, as a member of the Tickford Racing team, was the garage pit tour last Thursday. Tim Edwards, the team principal, took half a dozen of us inside the pit garage and showed us the workings of the Number 6 Monster Energy Ford Mustang of Cam Waters and Michael Caruso.
I’ve been fortunate enough to do the pit tour a couple of times in the past, all with Tim. He’s a welcoming, knowledgeable and gracious person and the way he invites you into the inner sanctum is only something that you dream of when you’re a youngster, watching it all unfold on the television. He also understands the important numbers in his business…..lots of them, like:
- How much it costs to build a door for a Mustang Supercar – by the way, it’s an eye watering number!
- The dollar value of materials involved in building a tail light for the car, which is manufactured in-house.
- How his rookie co-driver in one of the team cars was tracking first or second in two of the three lap sectors in the co-driver session.
- What the repair bill was for a single component of the car for the entirety of last season.
Now, whilst some of this information comes through modern telemetry, there’s plenty of it that comes about simply by:
- Recording data.
- Analysing that data.
- Interpreting the data to determine what it means in terms of performance.
Every family business has the ability to record the important numbers. Unfortunately, most don’t. Sometimes it’s just laziness. Mostly it’s about not knowing what to record. This means, most people don’t really know what the key drivers are in their business, that generate the activity, that create the result, that puts money in the bank.
Profit is the end result. Financial statements are an “after the fact” report that you have no influence over once the month, quarter or year is done. Daily and weekly tracking of key data, on the other hand, enables you to ask questions quickly, analyse your business in real time, and make tweaks inside your business in the right here and now.
If you don’t know your key drivers, maybe we should talk. It might just help you to understand why and where you’re profitable – and why and where you’re not.
This Week’s Tip
Depending on the business, there are between 12 and 20 key drivers.
Some are financial. Most are not.
All of them are critical to understanding what makes your business tick.