The operator lexicon
Field Guide
The numbers that actually run a business, defined properly: what each one is, how to calculate it, what good looks like, and the mistake almost everyone makes. For the longer answers, see Ideas.
Seats and Roles
Who owns which part of the numbers, and which seat is actually empty.
Labor and Capacity
What the team costs, what it produces, and the gap between the two.
Atomic Unit
An Atomic Unit is a standardized block of work, two hours long, used as a fixed denominator for measuring output independently of who does the work or what tools they use.
Direct Labor
Direct labor is the salary cost of the employees who directly produce the work a business sells. It excludes contractors, administrative staff, payroll taxes, and benefits.
Labor Effectiveness Ratio (LER)
The Labor Effectiveness Ratio is gross profit divided by direct labor cost. It answers one question: is your team producing more value than it costs?
Salary Cap
The Salary Cap is the maximum total labor spend a business can carry while still producing acceptable profit, including a market-rate salary for the owner.
Velocity
Velocity measures finished output against a fixed 2-hour block of standard work, not against hours, and it tells a founder whether a payroll problem is too many people or under-equipped ones.
Cash
How much time the business actually has, measured in days.
AP Days
AP days measures how many days your suppliers finance your business, and it is the half of the cash cycle most founders have never once negotiated.
AR Days
AR days measures the gap between doing the work and holding the money, and it is set almost entirely by 2 things a founder controls: when you invoice, and what you asked for.
Cash Conversion Cycle (CCC)
The cash conversion cycle is the number of days between your dollar leaving and your dollar coming home, and it is the reason a profitable business can still be broke on a Tuesday.
Cash Shot Clock™
The Cash Shot Clock™ is how many days a business can keep operating on the cash in its bank account. Runway asks how long until you stop. A shot clock asks how long until you have to take the shot.
Unearned Revenue
Unearned revenue is the customer deposit, sitting on the balance sheet under a name so dull that most founders never notice it is the best lever they have.
The Levers
The complete set of moves for fixing profit and cash, and what each one actually does.
Price
Price is the 1st of the 10 levers and the only one with no cost, because every dollar of a price increase that survives falls straight through to profit.
The 10 Levers
The 10 levers are the complete set of moves a business has for fixing profit and cash. 5 solve the profit problem, 5 solve the cash flow problem, and 2 hidden sub-levers sit inside the ones founders think they already know.
The Marketing Lever
The Marketing lever is the 5th of the 10 levers, held separate from overhead because marketing is a trade of today's profit for tomorrow's potential revenue.
Practice
How the numbers actually get run, and what it looks like when the running is theater.
Autopsy Accounting
Autopsy Accounting is financial expertise that only works backwards: a precise explanation of a problem, delivered after the last moment anyone could have acted on it. It is the most respected posture in the accounting profession and it is worth almost nothing to the person paying for it.
Financial Theater
Financial theater is any financial activity that creates the appearance of visibility without producing a decision. It arrives on time, it is correct to the penny, somebody bills you for it every month, and it changes nothing.
Owner's Piggy Bank™
The Owner's Piggy Bank™ is the personal spending that lives inside a business's books, and it is the first reason a company's numbers cannot be read straight.
SPOT Dashboard™
The SPOT Dashboard™ is the one page a business runs on: 5 to 10 numbers, chosen so an operator can decide without opening anything else. SPOT stands for Single Pane Of Truth, and a pane, unlike a source, has edges.
Every term here belongs to a discipline of the MEASURE × HACK™ Method.
The Field Guide is the operator half: the business numbers and what to do about them. The Method they come from, which covers a good deal more than the business, lives on measurexhack.co.