The US is full of entrepreneurial spirit, evident by TechRepublic’s report that reveals that 3 in 5 Americans want their own business even though 70% of startups fail. Consequently, identifying Knowledge Gaps and monitoring what works at your company and what doesn’t as an entrepreneur is crucial. This way, you can discover whether your business is growing and whether your efforts bring great rewards. However, business success is always vague if you have no tangible way to quantify and measure it. Below are some effective ways to measure small business success.
- Refer to your business plan
Every entrepreneur includes unique company goals in their business plans. Therefore, a business plan are one of the first things to consult to see how well your business is doing. For example, let’s assume you own a restaurant. You can include goals like increasing monthly net sales, testing new menu items, and improving your top-selling items in a year in your business plan for restaurant document. At the end of the year, you can refer to this document to determine whether your company achieved what it set out to do in the beginning. Business success differs from company to company, so this plan is one of the best ways to measure how well you have worked towards unique targets.
- Measure customer satisfaction
You can’t consider your business a success if its customers are quite dissatisfied. Therefore, finding out how satisfied your customers are with your offerings is another great way to measure small business success. Online reviews can give you great insights into general sentiments about your company, so always pay attention to the feedback you receive on Yelp, Google, the Better Business Bureau, and so on. You can also conduct surveys to know how pleased patrons are with your business, so keep this in mind.
- Conduct performance reviews
Employees are, without a doubt, crucial to your company’s operations. Their performance can make or break your business, so it is crucial to monitor it to know whether your company is heading in the right direction. Employee performance reviews are one of the best ways to measure how well your employees are faring. You can conduct performance reviews about twice annually to find out important things like how effectively your staff completes tasks and whether they are happy at their jobs. These reviews also give you a chance to offer crucial feedback that can help employees improve in key areas. Adobe research reveals that 80% of workers prefer instant feedback to annual performance reviews, so you can even consider this regular approach to stay on top of employee performance. In addition, you can also look to conduct a regular organisational health assessment to review the performance of your business overall. This can help to identify which traits are working and which need improvement; thus allowing senior management to focus their efforts in the relevant areas.
- Follow the money
Finances are the first thing many entrepreneurs look at when measuring how successful their small businesses are. However, it is not as straightforward as just checking out your company’s monthly profits to determine whether its finances are healthy. Instead, there are three main financial statements to look at: your balance sheet, income statement, and cash flow statement. The balance sheet captures all the assets your company owns and any debts it might owe, while the income statement displays profits and losses. Finally, the cash flow statement reveals how liquid cash is at your company, so you have a clear picture of how much money you have on hand to make various important business moves.