Every small business is unique, and no two businesses have the same definition of success. Especially for a newer business, measuring success meaningfully is critical. Measuring success in the small business world can be a challenge when one is often faced with having to compare themselves to larger or more established competitors, big winners on Dragon’s Den, and the like. However, this kind of success is not a necessity, nor is it terribly easy to measure. Here are some of the ways your small business can go about measuring success!
Well, this seems obvious – your business wants to make money, not lose it – but it can be more complex than that. Your business wants to stay in the black, but looking at profitability on a more specific basis can help. Which customers are the most valuable to you, and why? Sometimes, the metric you choose to measure – revenue, for example – might not be the best indicator of profitability. How much did it cost to acquire the customers you needed to generate that revenue? Focusing on the best customer segments for your goals will help your profitability soar.
Customer satisfaction is an indication that your company understands the needs of your customers. Understanding your customers and being able to satisfy their needs is crucial to the strength of your business. Just remember, one unsatisfied customer can negate the promotional impact of several satisfied customers. Having strong customer service polices will add to the success of your company.
Average transactions per customer
The focus here is to do more with your existing customers and turn them into loyal advocates and repeat visitors/purchasers. This metric keeps the attention on rounding out your services, adding more value, more products and more partnerships to the mix of your business.
Average dollar per transaction
When businesses are just getting started, this number is always too low. Use this measurement to put upward pressure on your own pricing. A hard number like this, brought down to the individual customer’s level, is much easier to understand in dollars and cents than all the gross revenue charts on the planet.
Perhaps the most important measure of business success is whether you — the owner — are satisfied with the results of business ownership. Dissatisfaction is contagious. If you’re not happy with your business, it won’t be long before your dissatisfaction begins to affect the employees and even the customers. Every once in a while, carve out time for a reality check. Identify the sources of your dissatisfaction and make the necessary changes before it’s too late.
If your business is looking for the help it needs to attain success by any measure, give us a call or visit www.merchantadvance.com!