How Do You Measure Business Success?
How do you measure success? When you’re running a business, trying to understand how well that business is doing can be tough. On the surface, this might seem like an obvious question with an obvious answer. Surely the success of your business is measured in purely financial terms, isn’t it? Of course, that’s definitely one of the ways in which you can tell how well your business is doing. Let’s face it, a business that’s not bringing in money probably isn’t going to last particularly long. But that’s far from the end of it. It’s indisputable that money sits at the top of the enormous pyramid that defines success. But to reach the top, that pyramid has to be built on lots of different layers.
The question is: How do you measure the success of those layers? Not only that, but another question to ask is: What are those layers? Try to think about what the different elements of your business are. With so many different elements that make up your business, you might be wondering. “Which parts of my business should I measure for success?” The answer to that question is both incredibly simple and seriously complicated. The answer is this. Everything. You should measure every single part of your business, both individually and as a whole.
The success of your business rests on your ability to measure and ensure that each and every aspect of it is working as well as possible. The problem is: How are you supposed to measure that success? Well, there are different ways to do this depending on what part of the business you’re measuring. But here are a few places that you should definitely start:
This is the first thing you need to do to figure out how successful your business really is. Raw data is the perfect way to see your business success laid out in black and white. Now, every business collects data based on financial income and outflows. That’s the most obvious because it feels like the one that has the most significant direct impact on your business. The problem arises when companies see that as the be all and end all of the data they need to collect. But there is valuable data to be gathered in every single part of your business. From the broadest financial reports to the smallest individual customer interactions.
Think about your marketing. Are you actually reaching customers in the most effective way possible? Not only that, but exactly how much is your marketing costing you? Is that cost showing itself actually to be worth it? How about your customer service? What is your company’s record of customer satisfaction like? Have you been spending enough time on maintaining that customer satisfaction? The best thing you can do is actually talk to your customers here. Put out a survey to allow them to let you know exactly what you’re doing well and what you could improve. It’s also worth collecting as much internal data as possible. Look at your employees. Are they working in the best and most productive way possible?
Turn That Data Into Information
When confronted with raw data it can be very difficult to translate it into something that you can actually use to make decisions. Much of the time you can do this without a lot of cost or effort at all. Excel is a fantastic product that allows you to input large amounts of data and create useful information from it. You can create charts that enable you to see trends quickly and clearly. Take the example of your staffing costs. Perhaps you’re able to clearly see that you have a staff member whose salary and work output simply don’t match up correctly. Creating distinct visual information from your data is one of the most efficient ways in which you can understand what it’s telling you. Likewise, Microsoft Access is a great tool for database creation which will come in handy if you’re handling a lot of data.
Of course, there’s a pretty good chance that you’ll want to go more in depth than that. To do that, the best option is considering hiring a professional service. Say you want to measure the effectiveness of your marketing more closely. If that’s the case, then you won’t want just to look at your marketing as a single, homogenous entity. Look at it in very specific terms. Do you use social media as a frequent marketing tool? Then social media monitoring is an incredibly useful method of measuring its effectiveness. There is of course a cost involved in seeking out professional services. But if you’re able to use the information that is gathered in an intelligent way, then it will be worth it.
Another issue that numerous businesses face is that they treat measurement like something that they only need to do from time to time. You can’t treat measurement like a tax return. It’s something you need to be doing regularly and frequently. If you treat your measurements as an integral part of your business, you’re that much more likely to be able to see the benefits. Your business can’t afford to ignore data that shows that something needs to be changed. It can’t be overstated how important it is to remain consistently informed of the success or failure of each and every aspect of your business. Without it you leave yourself open to competitors, dissatisfied customers, and potentially losses.