How can you tell if your business is growing? Very simple, you measure it. You may have heard the expression, “If you can’t measure it you can’t manage it”
In my consultation with my business owners in Westchester County we work on success through focusing on their vision, their values, and goals. Then they execute their goals and measure results.
You need to have a strategic outlook on your business. Another way of saying this is that you look at the whole rather than the parts or you must work ON your business rather than IN your business.
What you measure is just as important as having and plan and executing it. For example, many business owners are familiar with the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization), or more simply said profit. That, however, is a measure of what has happened in the past. It may not predict what will happen in the future.
Using measurements that predict whether you are on the right track and will predict and shape your future are far more effective than relying on measurements of what has already happened. Here are some important ones.
Let’s start with the measurement of customer loyalty. Customer loyalty is the measurement of how likely customers are to recommend your product or services to others. Customer loyalty has a direct correlation to future sales and profits.
Networking and lead development is required for business sustainability. What is the activity and frequency of activity that is required to have one conversion to a sale? It is important for you to measure the rate of activity that you need to get desired sales results. This rate of activity varies by industry, business, and business owner. It is important to track your sales development activities to determine the right level of activity to achieve acceptable results.
It is important to measure the results of your marketing and advertising activity. Business owners can waste substantial amounts of money on unfocused marketing and advertising. Before creating a marketing strategy make sure that there are measurements such as web site visits, converted sales, response to mailing, and the like.
If you have employees, make sure you measure the effectiveness of your workforce. This is done through clear description of duties and then holding your employees accountable for achievement of goals. Also, you should measure your staff engagement which is the employee side of your customer loyalty measurement.
Organize all the measurements that matter to your business results into one area and create a “dashboard” to monitor overall results. This serves the same purpose as your car’s dashboard. It is an overview to let you know about any malfunctions. You keep a dashboard to measure your performance against the goals you have set. In addition, you use it to track trends and make necessary adjustments in activities as needed.
This process really works. History has shown that businesses that have written goals, and measure and track those goals will outperform the competition.
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