It’s November, and time to start wrapping up the year by taking stock.
As an entrepreneur, I know how important it is to see what works at your business and what doesn’t. Business is unpredictable, and about the only thing that you can count on is that everything continuously changes. You need to constantly measure your business performance so you know what’s successful and what isn’t. So, how do you measure small business success?
Small Business Success means Knowing How to Measure It
Being an entrepreneur is a journey. And an exciting one at that! You’re always a work-in-progress, and you’re never entirely finished. You have successes and failures. Be prepared to measure your business so you can gauge your achievements and small business milestones. It’s important to measure your business performance and have a plan when it comes to doing so. There are a number of methods you can implement to accurately measure small business performance.
We’ve outlined our top 5 advice snippets below.
1. Look At Your Business’s Financial Statements
You need to know how much money your business is generating. Money is clearly important when you run a business – without it, your business can’t succeed, and with it, you can grow your business and carry on pursuing your entrepreneurial dream. How much money is going in and out of your business?
The three main financial statements you can use at your small business are: the income statement, balance sheet, and cash flow statement.
· The income statement measures the profitability of your business during a certain time period by showing your business’s profits and losses.
· The balance sheet shows your business’s financial health, measuring how much you owe and own.
· Cash flow statement shows how liquid cash is at your business.
2. Check Customer Satisfaction
Customer satisfaction is top priority. If your customers aren’t satisfied after buying from your business, they probably won’t do it again. And you need to rely on repeat business.
How do you measure customer satisfaction? There are a few different ways, including through surveys, reviews, or even asking, “Did you find everything you were looking for?”
3. Calculate an Average of How Many New Customers You Get
Knowing how many new customers you get is a great way to measure your business’s success and also to predict growth. If your business still has the same 10 customers, you should consider upping your marketing strategy game.
Develop a client list with email addresses to track customers. That way, you can easily count the number of new customers per month or year.
4. Conduct Performance Reviews
Let’s not forget about your employees, who are essential to the smooth operation of your business. A good way to measure business success is through conducting performance reviews to see how your employees are, well, performing. Find out who has extra time to take on more responsibilities, who is unhappy in their role and find ways to overcome these issues.
5. Stay Current and Top of Mind
It’s a good idea to keep your finger on the pulse by knowing how the market is doing. This will help you measure the success of your own business. If you and your competitors aren’t doing well, it might be because there is a dip in your specific sector.
Don’t get disheartened if your business’s profit decreases- it might be a result of the national market and this is out of your control. Look at it as a good time to develop and introduce new products if demand for your current product or service is put on hold.
All of these things will help you to analyse, take stock and assess what your small business needs in order to be truly successful. Slow and steady wins the race – being an entrepreneur is a challenge, but there are great rewards.