How can you be sure the work and resource you’re investing into your business is having a direct impact on your growth and bottom line?
Follow our simple tips to measure and track key parts of your business, and you’ll be able to take full advantage of the opportunities open to you, as well as identify and mitigate risks.
Define your long-term goals and determine your measures for success
Make your goals challenging, but achievable. Do you want to increase customer retention, improve market share, penetrate a new market segment, or invest in R&D? Be specific and make your objectives measurable. Business goals are often too vague, so use very specific language to describe evidence of your business goal being achieved. It is this evidence that becomes the basis of what you measure.
Set up meaningful Key Performance Indicators (KPIs)
Make sure your KPIs are relevant to the objectives of your business and the business processes that must improve to successfully reach those goals. KPIs are most successful if simple but not simplistic, and when managers and employees feel a strong sense of ownership over them.
Develop methods to collect and organise data
Determine a process for tracking and reporting all relevant data. Report on trends that emerge from your findings on a regular basis. Make sure that all business processes are included in your data gathering, such as marketing, sales growth, market share, product quality, workforce, training and budgeting.
Track your actual income versus your goal income
Make sure you track your actual income versus your goal income not just every year, but each month and, if possible, each week. Late payments can cause havoc with a business’ bottom line. Most comprehensive business management software packages will help you keep track of this, as well as give each business department oversight of what the others are doing and allow for collaboration.
Track your expenses
This is probably the one part of your business that you don’t really want to grow. But by having a proper overall view of expenses, you can project your income and make better, more informed decisions about spending money elsewhere.
Track your competition
It’s all very well focusing on your own KPIs and business expenditure, but it’s imperative to have a clear idea of what your main competitors are up to as well. Obviously hacking into their computer networks would be a clear breach of cyber security, but there’s a lot of information in the public domain: look through annual reports, do internet searches and read industry press and trade association publications.
Measure marketing effectiveness
Effective measurement lays the groundwork for future plans, so keeping track of results is the only way to improve your marketing efforts. The key is determining which data should be collected. Your marketing results may be measured in sales market share, store traffic, number of inquiries or reduced complaint rates, or other metrics.
Track your employees
Having top employees who are motivated is critical to your company’s success. Track the effectiveness of your recruitment methods and retention levels, as well as employee satisfaction and performance, and then you’ll know when to hire, when to fire, how much you’re spending on your workforce and for what ROI.
Apply the information
Analyse the intelligence you’ve collected, draw conclusions and make recommendations based on it. Develop a plan for seeking out opportunities to demonstrate your company’s strengths. If weaknesses are critical drawbacks to your company’s success, develop a plan for overcoming them. The old adage that you can learn from your mistakes may sound glib, but when it comes to business growth, it really is the truth.