We can talk about goals, KPIs, and growth as much as we like, but the true measure of business success is drawn from a far greater perspective:
- Is your business what you intended it to be?
- Does your business meet your lifestyle needs and goals?
After all, these are the two prime reasons that people enter business, to achieve an ambition and to gain financial security that facilitates their lifestyle.
From that overarching position, we then work backwards to measure business performance in the following areas:
Business financial statements
Measuring your business’ success starts with the cold hard basic of how much money it is bringing in, making the first port of call your business financial statements.
These tell you what exactly is coming in, what’s going out, and how far above or below breakeven point your business is.
The three main statements to look at here are your:
- Income statement – which looks at profitability
- Balance sheet – which determines your business health and what you owe and own.
- Cash flow statement – Which indicates how much liquidity your business actually has
Beyond the cold hard cash, measuring success is also about determining how your customers feel about your business venture.
The most important thing to ascertain here is whether they are satisfied and likely to buy from you again by actively seeking their feedback.
The reality is, satisfied customers who are willing to either use your business again or refer you to other customers are a core element of business success. Further answers can also be found in the general numbers of your business, including repeat versus new clientele.
When you know how many new clients you average each month or each quarter, you have the opportunity to predict growth.
This also allows you to gauge how effective things like your marketing efforts are. For example, if your business attracts few new clients each quarter, it’s likely your marketing isn’t reaching your ideal client where they ‘hang out’.
Performance reviews and staff feedback
Client satisfaction and new client numbers tell you how your business is viewed from the outside, but what about the internal workings and culture of your enterprise?
It’s no secret, happy staff result in happier customers, so it’s equally important to understand how staff feel about your business.
You can gauge this by actively seeking staff feedback, having an open-door policy, and simply by asking staff about potential areas of business improvement during their annual performance review.
Market trends and SWOT
No successful business operates in isolation. It is impacted by factors like market forces, competition, innovation and more.
To truly understand your business performance and its position, you should view it within the context of that market, regularly undertaking exercises like listing your strengths, weaknesses, opportunities and threats (SWOT) to see how it’s performing right now, in the current conditions.
Regularly assessing your SWOT also allows you to understand both future opportunities and liabilities.
Your own expectation
Every business owner has expectations of their venture, and whether your enterprise meets (or is on track to meet) those business goals is a definite measure of its success.
As a business owner you should regularly ask yourself:
- Is this where I want to be?
- Is this what I wanted?
- Does my business make me happy?
- Does it serve the purpose I intended it to in my life (financial, work/life balance, lifestyle)?
After all, the true measure of business success is the satisfaction it affords you as the business owner, and the personal goals it allows you to attain.
If you’re looking to ensure your business meets your expectations, you can book a discovery call with me here, or learn about the different ways we can work together to achieve your business goals and create a business plan.
Let's Talk About Your Business
I work with business owners and their teams to grow their business and achieve goals through strategic coaching and mentoring services. Looking for something more from your business or just a little clarity, take a moment to book a call with me, and let’s talk about your business.