As the old saying goes, ‘you can’t manage what you don’t measure’. As a business owner, you must keep meticulous business records so that you can determine how your business is performing at any given moment.
Having access to this data will allow you to make the right decision for your business moving forward. When it comes to tracking your progress, there are many different approaches that you can take to determine the performance of your business over time.
Managing a business can be challenging, especially as a small business owner. Wearing many hats, entrepreneurs often have their attention pulled in a range of different directions, taking them away from where they are most valuable to the business.
From staff scheduling to marketing to accounting, there are many different tasks that the typical small business owner needs to concern themselves with. Utilising staff rota software from Deputy, cloud-based accounting applications and other business tools will help you to manage these day-to-day tasks so you can focus on how your business is performing. With a keen eye on your business performance, your company can track progress carefully and adapt to the future needs of your business with ease.
Let’s take a look a few useful ways that small business owners can track the performance of their business.
Financial Statements
One of the key indicators of how your business is performing is in how much money you are generating. Having an understanding of your key financial statements will help you to understand where your business is performing well and where it is struggling, the most important financial reports that small business owners need to pay attention to are the income statement, balance sheet and cash flow statement.
These three documents will tell you how profitable your business is, the financial health of your company and how much liquid cash you have available at any time.
If your business operates online, having the guidance of an Ecom CPA can further enhance your understanding. They can offer deep expertise in analyzing and interpreting these statements within e-commerce, bringing light to unseen opportunities or hidden challenges.
Customer Satisfaction
Without a solid client base, your business will not survive. Your customers are the heart and soul of your business and without them, you would have no income at all. Be sure to pay attention to customer satisfaction to gain an understanding of how your business is progressing. Solicit reviews and feedback from your customers to gain an understanding of how your business is perceived by your clients.
The more honest, positive reviews of your business there are, the better your business is likely to perform going forward.
Number Of New Customers
Tracking the number of new customers coming to your business over a particular period will help you to determine how your business is progressing. You can track these metrics and compare the data over periods of weeks or months
If the graph is showing an increase in the number of customers that you are doing business with, you are on the right track. If this increase also correlates to more positive customer reviews, that’s an even better sign of your progress.
Performance Reviews
Your staff members are a critical component of your business and its success. When tracking the progress of your business, you need to also track your employee’s productivity and performance.
Conducting regular performance reviews will allow you to track how your staff is performing over time. If there are areas where they are not doing well, you can take this opportunity to make changes to your business processes to help your staff with their responsibilities.
You Can’t Manage What You Don’t Measure
If you don’t have an accurate picture of how your business is progressing over time, it will be difficult to make the right decisions for the future of your operations. It’s also important that you take an overall look at your business performance instead of just focusing on the financial data
Customer satisfaction, how many new customers you are acquiring and reviewing your employee’s performance regularly will help you to gain a better understanding of your company’s progress overall. With this information, you can adapt as required going forward and continue to move your business to new heights.