Continuing our probing of the focus points of driving business results, we will explore “Key Metrics Usage” in this issue. There is an old business adage that still rings true today: “Things that get measured generally get better.” This is particularly true in organizations that have reasonably talented people who have reasonably “bought in” to the objectives of the organization.The key question, of course, is “What do we measure?” The answer is, measure things that are important to your desired financial results— ongoing profitability and cash flow. You want to measure things that, by doing more of them or less of them, will make you more money. In theory, if you are measuring the right things, you should be able to predict what your financial statements are going to say. Depending on what business you are in, some or all of the following items may be “Key Metrics candidates”:

Key Metrics Candidates::

• Cash Flow:: This applies to all businesses. You want to stay on top of your cash position and understand upcoming inflows and outflows.• Sales Revenue:: In total, by product, by store, etc. Second only to cash flow.• Sales Returns, E xchanges, Refunds:: These can vary sharply by store.• Gross Margin %:: Same as sales revenue. What you make on what you sell.• Orders:: If your business takes orders that eventually become sales. • Potential Projects:: For an engineering or construction firm, the number, dollar value, timing and probability of the projects you are chasing.• Past Due Orders or Milestones:: A key customer-service point. Those instances where you have “in effect” broken a promise to a customer.• Rework Orders:: Again, customer service. Those instances where you have to do something a second time for a customer because the first time was not correct.• Inventory Turnover:: In total, by product, by supplier, by store, etc. Keep the fast turners in stock and keep liquidating the slow turners.• Receivables:: Aging by customer, with current status noted.• Payables:: Aging by supplier, with payment plan noted.• Factory Cycle Time:: If you manufacture a product for sale.• Labor Productivity:: If you either manufacture a product or perform a service. Hours per unit of output, direct hours versus payroll hours, overtime hours.Another key question is “How often do I measure?” Looking at the above list, I suggest daily for sales revenue, monthly for inventory turnover and factory cycle time and weekly for everything else. ÎOne last question:: “How to measure?” We suggest the following:1) For items which have a target, such as sales revenue, measure versus the target and against the actual for the same period in the prior year, summed weekly.2) Inventory turnover, receivables and payables agings and factory cycle time are best reported in trend format, looking backward for 13 months.3) Cash flow should utilize a looking forward, rolling 13-week forecast.4) Everything else can utilize a trend format looking backward for 13 weeks.5) Always keep track of the “best ever” and the “worst ever” and note whenever a “new record” is established.www.thebizmd.com808.672.0220

There is a big, bright psychedelic mural on the office wall of Crosstown Couriers LLC. It wraps around the room behind several different bicycles, all hanging in a row. In the corner is a sink and on the counter is a behemoth-size jar of protein powder. Three clocks labeled “Airport,” “Kahala,” and “Downtown” that are, oddly, all set to the same time décorate other wall space. On one side, a couch fits neatly beneath a ten-foot-tall storage loft. This is the “lobby” and across from it sits Kendall Sexton, owner and operator of Honolulu’s Cross Town Couriers. Sporting a foam trucker hat, shorts and a muscle shirt, he isn’t your typical boss.“This is the war room,” Kendall says, looking around the small office, pausing for a moment to take a client’s call. He closes the phone; “It’s us against the cars. If drivers used their blinkers as much as they used their cell phones, it would make things less confrontational. It’s like a constant battle,” the 25-year-old Massachusetts native says. Kendall is at the helm of Honolulu’s only bicycle-messenger company that has grown with more clients and messengers since its inception in November 2007.“We have about 80-to-100 clients. Some use us five times a day and some use us once a month. It really depends,” he says. Monday through Friday, Kendall and other contract couriers can be seen zipping all over the city, delivering an assortment of different packages.“It’s a lot of graphic stuff, CDs, architecture plans, some court filings here and there. Sometimes we have Xerox boxes full of documents. I’ve even delivered a growler full of beer before, so pretty much anything,” Kendall says, laughing. Crosstown runs packages from the airport to Kahala, but many of their clients are located in the downtown area.“The way it’s set up is you try to get multiple things going at once so your rider’s not going out and coming back and going out and coming back. They’re going out with four or five things and doing it along the way,” Kendall explains. Known for timely deliveries and feasible rates, the company has built a catalog of regular clients, such as FCA, Joyce Timpson & Associates, and Hawaii Law Group.“Oh and don’t forget Tesoro,” Jason Lee interjects, suddenly entering the office, full of unusual energy for a Monday morning. Sporting a cleanshaven head and a similar muscle shirt, Jason pulls up a seat to chat about life as a professional bicycle messenger.“This is the best job I’ve ever had. I have never had a job that I just wanted to wake up and go to like this,” Jason says. Hailing from Orange County, California, he is one of Cross Town Couriers fulltime riders with a craving for speed. “I love to go fast and I like when there’s that time constraint,” Jason says.Speediness is no problem for these guys who can get from downtown to Kapiolani Park in 10 minutes or to Sand Island in 7 minutes. While most courier companies use vans or even walkers to deliver packages, Crosstown’s use of bicycles is both time-efficient and environmentally friendly. “Most of us are using green bags to express that we’re a clean company. There are not that many green bags around so they stand out,” Jason says, while on the way out for his first mission of the day.Crosstown Couriers continues to grow through word of mouth as more daring riders take to the streets. “This is a really fun job,” declares Kendall. “This isn’t a business that you’re gonna get filthy rich off of, but everybody has fun together and it’s cool to go out and ride your bike all day. So the more people that get involved, I’d say the better. 

 

 

Kendall Sexton, OwnerCrosstown CouriersCourierscrosstowncouriers@gmail.comcrosstownhonolulu.com 808.853.0024