It’s so easy to get caught up in the day to day running of your business that sometimes you forget to look at the bigger picture. Thinking longer term and utilising strategic planning will benefit your business performance in the long run. Planning and reviewing consistently will build a successful small business and pull together your team to ensure everyone works towards the same goals.
Reviewing your business performance will be particularly useful if:
You are uncertain about your overall business performance
You wish to get more out of your business
Need a new business plan
Your business is expanding / moving in a different direction
Your business is not performing well
Measuring success in a small business?
Having a plan to review business performance is a must! You want to identify some key performance indicators (KPI) first by analysing what your business values and needs. Here are some tips on how to measure your business performance:
Ultimately, most businesses priority is to generate profit. A basic way to measure success as a small business is to see how much money you’re generating. As a small business, it might be challenging to get funding. So, knowing how much money you generate and whether it’s a viable system is necessary for survival and growth.
Every business needs to keep track of their; balance sheet to see company assets, cashflow statement which tracks cash entering and leaving, and income statement to track profits and losses. These statements will show the money flow of your business.
An important measure of success for a small business is their customer satisfaction. Staying on top of customer experience and satisfaction will help retain customers. Customer reviews help improve your offering and build brand trust so make sure to consistently source customer reviews. Additionally, make sure to satisfy customer reviews and constantly develop your brand offering.
A useful customer satisfaction KPI is the average customer satisfaction score. You see these all the time on reviewing channels a company might have 4.5 stars with 1000 reviews. Already new customers are likely to trust this brand.
How many customers do you get? A simple KPI to measure business performance. Keep track to set attainable targets and compare with in future dates. It’ll also highlight whether your strategies are working or not. If you’re consistently getting 1 customer a week after 3 months, it’s probably time to change your approach marketing.
Some data to look at for customer statistics include:
Customer retention rate will display your business’ ability to create returning customers. Small businesses love repeat customers as it ensures repeat profit with less resources spent on marketing.
Cost per lead (CPL) shows how much you are spending on generating one lead. Having CPL data allows marketing teams to set their goals, calculate ROI and determine future budget to efficiently allocate resources.
Conducting performance reviews
Set dates throughout the year to review your business performance and stick to it. For example, if you plan campaigns in quarters you will want to review them at the end of the quarter. So, keeping on top of your reviewing processes will help your small business stay ahead of the game.
Setting reviewing dates depends on the size of your business and offering. Make sure the frequency of the reviews does not interfere with your day-to-day business running.
Knowing what’s going on in your industry will help you understand how your business should be performing. Are you performing better or worse or average compared to your market? It’ll help to understand if external factors are affecting your profitability or if its internal and needs to be addressed.
How happy are you and your team with the model of your business? Is there anything that needs to be addressed? A happy and motivated team is the the backbone of a successful small business.
Want more marketing advice to launch your successful small business? Check out our other blogs!