Want to know how to improve your business’s performance? This is a common question from small business coaching clients. To start with you need to know how it is currently doing. This involves measurement. You can’t really improve something unless you can measure it.
Without a base measurement to track your performance going forward you are basically in the dark, just like the majority of small businesses. Many business owners want to improve their business performance but feel overwhelmed and confused as to where to start.
Then there are the business owners who are absolutely in denial. They are fearful of measuring their performance as the reality of hard facts would seem unbearable. It’s no use hiding your head in the sand when it comes to what is happening within your business. One of the most effective things you can do in your small business is to define just five performance indicators or statistics, gather the data on a regular basis and present that data in graphical form.
Something happens within your brain when you see graphical representations of what’s happening within your business. To begin with you may just set up and track financial data such as the amount of revenue you generate per month, the gross profit as a percentage of revenue, the overheads as percentage of revenue and, of course, your net profit.
Once you realize the benefit of measuring the financial aspects of your business, you may then see the need for measuring staff productivity, customer satisfaction, marketing and many other areas that present potential for improvement.
Capturing this data does not have to be complex or time-consuming, but the payback can be huge. When it comes to marketing and sales, simply putting in place a system where every new incoming caller or visitor is asked where they heard of your business can produce valuable feedback.
The caller may have come across your business via an offer you had on your website, Facebook, signage on one of your vehicles or that flyer that you left at your last networking event. Knowing how your various marketing channels are performing allows you to direct more of your budget into those that are producing results, and perhaps focus less energy into those under performing tactics.
I’ve never seen a successful business that doesn’t value and rely on key performance indicators in every aspect of their operation. Running a business is hard enough, don’t do it blindfolded!