What Gets Measured-Gets Done

I can't remember who came up with the above phrase, but it basically means if you measure something over time and crucially make someone responsible for it. Then you can keep that particular issue under control and take corrective action if needed.
So for instance you may have a product X, which comes with a 1 year guarantee. Now some of these products are going to come back under this warrenty- so you want to be able to measure it.
A simple measure might be returns per 1000. It could be further broken down by type of fault/total faults. If this measure is monitored over time, you can see if it is getting better or worse, then investigate the reasons why and take corrective action, to improve the this statistic. Having a budget/target will help to keep this figure in check. Having a person responsible for this should ensure something gets done about it. Hence what gets measured gets done.
Could you apply this to your business?
If you are a one man band you probably have a rough and ready grasp of the numbers important to your business-albeit they are in your head rather then on paper or in a spreadsheet. But once you start to employ people these performance indicators become more important, as they will be what you monitor to control and manage your business and your staff if you are to be successful.