Measure your Business: 5 Tips for Making Figures your Friends
How’s your business doing?
How do you know? Have you measured your progress? Tracked your conversions, returns and referrals? Compared all numbers to previous periods? Made adjustments and monitored their effects?
If you’re like most business owners, you’re canned answer is “Good.” However, you probably have little evidence to back it up, and there’s usually one reason why:
Tracking your business’s progress is boring and tedious. Plus, it makes you nervous; it’s much easier to coast along, assuming you’re improving every month. There is a fear that measurement will reveal areas that need improvement…or worse.
All of this is understandable and natural. It’s comfortable to ignore what could be bad news and instead choose to live in the blissfulness of ignorance. However, if you want your business to be successful, to grow…you must measure what matters and use what you find to make adjustments. This is the most direct (and speedy) path to business growth.
More than half of UK businesses don’t survive past five years, and one contributing factor is the unwillingness of business owners to track their own progress (a.k.a. step on that virtual scale). Improvement is practically impossible without knowing what areas need improvement—and in what order and to what degree.
Tips for Making Figures your Friends
Tracking the progression (or regression) of your business can be a tricky habit to form. Not only can the undertaking be fear-inducing, it takes time. Here are some pieces of advice for getting starting and staying on-track with tracking:
- Establish a starting point. Your second measurement will only give you as much information as your first measurement allows. So get going! Launch the analytics. Open a spreadsheet. Start recording this month’s net profits, new customers, returning customers, website visitors, new social media likes/follows/shares/Retweets, referrals, customer complaints, merchandise returns, lead time for order fulfilment, employee turnover, shipping costs…and whatever else will serve as an indicator of your business’s progress.
- Define your focal points. Determine what three areas of your business are most integral to the fulfilment of its mission, then focus most intensely on those areas. Determine what number(s) will most accurately measure the performance of those areas. Put these at the top of your tracking list.
- Set improvement goals. After you’ve gotten into the swing of recording your metrics of business performance, set goals for improvement. A 2% net profit increase or a 5% increase in employee retention over the next two years are examples of performance goals.
- Stay committed. As your business grows, you will try new things and explore new markets. The only sure-fire way to know if any of this is working is to measure the results. AND the only sure-fire way to assign specific results to specific actions is to measure regularly (monthly). Skip your tracking exercises for even one month, and results will be skewed.
- Utilise a syndicated service. As your tracking becomes more sophisticated, you are likely to benefit from the use of a syndicated tracking and measurement service. Google Analytics is just one example.
It’s so easy to make excuses—to take a guess at how your business is doing. The unfortunate truth about this behaviour is that your business is likely to join the majority of start-ups laid to rest in the business graveyard.
If you want your business to thrive and grow, it must be cared for, tracked, measured, monitored…and nurtured. Close attention to the numbers that matter will not only tell you if you’re on track, they will highlight areas in need of improvement so that your business can be the best it can be.
Need more information on how you can track your business’s progress and use what you learn to grow it? Then let’s schedule a 30-minute consultation, in which we’ll discuss your unique business, your goals and the best way to achieve them. Contact me here.
 RSA (a British commercial insurer)