When anyone sets up a business, whether they choose to be a solopreneur or a multi-national, it always starts out with a strong vision for freedom and a desire to be the best at what they do. Somewhere along the line a few issues drop by. If allowed, they hang around. How do you know the effect of these issues on your financial growth and reputation?
In this article we’ll look at two different ways to measure business success. One is from numbers that are available in a business and another is by creating a strong measuring gauge. This will help you make timely and considered decisions for success.
It’s simple to measure financials as these are numbers generated by the business from its regular activities. For this process to be useful, it’s important to set aside time to get your accounts updated regularly, by a set date. The next step is to learn how to look at the numbers for growth. This requires a little more in-depth consideration.
It’s advisable to have a top-level dashboard of 3 to 4 key daily numbers to look at, that are specific to your business. Then under this dashboard to have a selection of no more than 5 numbers that tell a story about the top-level dashboard.
For example, you may have a bank balance as a top-level dashboard item. You may have a benchmark to know when you feel that your business can survive the next week or month. Underneath that dashboard, you can select items such as money expected to be paid in and paid out, so that you can identify whether your cashflow can meet that expectation. This will give you strategies on actions to take to maintain the cash level at your bank. This is one small example.
What about the things that seem difficult to measure, such as team morale or reputation? Let’s take reputation as an example. Many of the larger companies send out client questionnaires and have customer support departments to help them to regularly and consistently consider the feedback and score. How can smaller businesses get an idea about their score?
Have 3 to 4 areas that you would like to be known for and ask your customers to score no more than 2 short associated questions based on these areas. If the score is below a certain level ask a follow up question to find out what would have it higher. If several people give similar feedback, then this will give you areas for growth or tell you that you are not attracting your ideal client. Either way you will feel empowered.
So, jot down a couple of key dashboard scores based on: What will you start measuring from now on? What will you do to manage those measures to have a better business for you?