How to measure success of a growing business. Every business owner’s dream is to be on top of its competitors. Hence it not always about the effort or how productive your business is. Sometimes you need to figure out how your business is growing so that you can put in much effort and increase productivity. But how to determine the growth of every business is the problem. So below are some of the ways we can measure success of any business. So let get to it…
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Ways to Measure Success of a Business
1. Through Customers Feed Back
This is fairly the easiest way to measure the success of your business. By listening to customers’ feedback you may be able to find out whether they are happy with your products or service. Some customers are very clear in life in the sense that they may put all that they want about your products into written words and send it to you. Other customers do this by mail or contact details attached to a product. So by seeing some of their suggestion you may be able to rate your business on a certain percentage of how it has provided those customers’ needs.
And not only will you be able to rate your business growth with this guide. You will also discover the kind of service customers want from you. So that you can meet such requirements to keep them coming back month after month.
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2. Total Number of customers
Are your customers increasing or decreasing? Well, if it is increasing then there must be something wrong somewhere you do need to find out. One big thing that drives customers away is the kind of service you provide for them. Let me give you an example of this. I have been buying coffee from a nearby shop each blessed day. But because of some bad service, I got the other day I no more buy it from there. Let me tell you what happened…
It was an awful morning and I decided to get a cup of coffee so I went into the shop to get some. I ordered a cup of it and sat down waiting. One of the coffee workers passed by my side holding coffee on a plate. She accidentally poured a bit of it on my shirt and stirred at me without even saying sorry or asking me anything. I was worried about why she stirred at me when passing. Two minutes passed by and I got served and I begin to enjoy it. Suddenly a young girl sitting left to me on a different table came close to me and said, sir, there is a stain in your shirt you can get rid of it with this drug.
I looked and found that yes I have been dirtied. I was worried about how that happened but I quickly remembered why the coffee worker was stirring at me on the shoulders (She poured a bit of coffee on my shoulders and just passed by). Because of this bad service, I made my mind never to go there for coffee again. And yes up till now I still don’t go there.
So now what will this shop lose? One customer right? Yes, and if this kind of service continues for a year how many of it customers do you think they will change their root? You can’t tell, right?
So, that is the other way of measuring the success of a business. You can make a document of your total customers monthly. And each month you have to check whether you are losing customers or gaining customers. If you are gaining more customers then it might be that your service is good. But if you are losing customers then it might be that something is wrong somewhere. You do need to find out and fixe it if not it going to hurt the growth of your business.
3. Look at The Business Total Net Profit and Expenses
The other way to measure the success of your business whether small or big is by looking at its total net profit and expenses. Let make this straight forward and simple. Pick a financial statement of your business for the past ten or five years. Look within, what difference do you see? Is the total net profit the same as the past five years? Or is the expenses column higher than the profit?
Well, If the total profit net currently is higher than the past five years then your business is growing. But the rate on which is growing can only be determined by what Is on your financial statement. To find it out, calculate the total percentage rate for each year and see the range between it. If the percentage rate of the past 3 or 5 years is highly in increasing order then the rate at which the business is growing is really high. But in case it is not in increasing order then it means there was a month where your business performed much better than some month or year.
Tracking the success of your business growth by the total net profit or the expense is fairly easy. You don’t need a college professor to explain things in details to you. All that you need is to be able to read and understand numbers. But if this is something you find it difficult to do you can consult your accountant. Or if you don’t have one you can ask a friend or a relative who understands numbers to explain things to you.
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4. Conduct Performance Review
Your employees are the biggest asset you have for growing your business. Without them just tell me how far your business will go. Will you do the entire task yourself? No, you can’t so they are the main factor in measuring the success of any business. Each year you can decide to conduct at least one business performance review to see how comfortable your employees are working with you. With this, you may found out from their own mouth about things you need to improve on in the business. They may also suggest new ideas that you can take into account.
Remember the saying that says “Two heads are better than one” yes you don’t have to depend on your own understanding all the time. Sometimes what you think might work out may not. So by conducting a business performance review and telling all your employees about your new plans. They will think about it and if any of them have many ideas about it he or she may share it with you.
Let see, how to measure success of a business by conducting a performance review. First, you need to ask your employees about questions that may help you to determine how well the business is doing. You can ask them questions like, Guys how do you rate the business with this our competitor, This year and last year which one do you think we have been much productive?
If they give higher remarks on all the questions. Then it might be a sign that the business is growing far well. But if the remarks is low then you do need to do something to ensure a high growth. So always take your employees into an account when you are trying to measure your business growth and remember their in a team with you. If the business will succeed 60% of it is on them.
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5. Sales Indication
Sales indication is also another way you can measure your business on. But before you can do this you need to be taking records of all the sales for every month or year. This way you may be able to find out which month or year you made a lot of sales. If it seems that over the past 5 months or 1 year your sales have dropped then it might be that the growth of your business is falling and you do need to do something about it.
But if it is in the other way round then the business is doing well in the market. You can also take into account the sales rate of your biggest customers. If you find out that the quantity of products they purchase from you has decreased then there might be something wrong. But if it keeps increasing then they are happy with your service which means your business is growing.
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Final Thought on Measuring Growth of Business Success
Above are the factors you can take into account to measure your business growth. No matter how big or small your business is you can apply the above principles with it. Knowing your business growth rate is an essential factor every entrepreneur must know about his or her business. You may be able to assess how your business is performing in the market helping you to improve on your competitors to achieve higher profit.
