In my previous blog, I talked about the idea of success, and working out what success means to you. It might be that you’re in business for financial gain and the ability to maintain a certain lifestyle. It might be that your idea of success comes from reputation or visibility. Or a combination of all of these things, and more. But it’s not enough to know what success looks like. We also need to know whether we are, or at least are likely to, achieve it. And that’s why understanding how to measure business success is so important.
The reason for this is because when we measure success, and put in place appropriate targets and metrics to track how we’re getting on, we make progress. And when we make progress, we build momentum. And with momentum comes confidence, and even greater achievement.
5 ways to measure business success
As you’ll have seen in the earlier blog, there are a number of things that unite successful businesses – being customer-focused; being strategic; knowing their numbers and being supported by strong processes, along with looking after their people. Here, we talk about how to measure business success against each of these points:
The question here is simply, whether or not your customers are happy, whether they remain loyal to your business, and whether they champion your business to others. There are various ways to measure this, dependent on the nature of your business, and it’s important to decide on the most important metrics for you. That said, examples include measuring your response time to customer queries; evaluating your customer feedback and tracking how many referrals you receive or how many people become repeat customers. All of these things provide incredibly useful insights in terms of how to measure business success.
This point is more of an internal, rather than externally facing question, and in my view, if you’re being strategic, you’ll know. Being strategic is about taking time – regularly – to work on your business as well as in it. It’s about maintaining a longer-term view and sense of direction, rather than just a day to day To Do List. So in terms of measurement here, think about how new working practices and approaches are embedded, and how effective they are.
Know your numbers
If your numbers are new to you, then the measurement of success here starts with your own learning, and the impact of the new knowledge. Have you reached a point when, for example, you can confidently talk about your margins and ROI? Then, have you established and embedded processes which allow you to keep track of your numbers. Finally, are you working in a way that allows you to use the new knowledge and ways of working to benefit your business? For example, has an improved knowledge of your cash flow led to more informed investment decisions, and an improved ROI?
The way to measure success in the context of processes and procedures is in the improvement that they facilitate. An example of this might be the efficiencies created when you plan your social media ahead of time. Or the lack of stress at tax return time when you’ve been carefully managing your finances throughout the year. Then, you can take the time and resource savings that you make, and focus the extra energies on improving things for your customers.
Looking after your people
If you’re a solopreneur, the way to measure this is how you feel – and how this feeling translates to how you do business. When we look after ourselves, we are better equipped, both physically and mentally, to look after our businesses. We have more energy. Greater confidence. And to focus both of these things on our businesses can be nothing but positive. If you have a team, the same applies, of course, when you look after people.
If you look after your staff, they’ll look after your customers. It’s that simple.Richard Branson
Over to you
What then, does this mean for your business? Well, take your definition of success, and the five aspects of a successful business as described above, and take some time to think about how they apply to your business. Make sure you have processes and procedures in place to deliver the things that will lead your business to being really successful. And identify the metrics that you need to track to monitor your delivery.
And if you get stuck of course, you can always book a session with me and we can work together to get everything you need, in place.