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No matter how well your business is performing, there is always room for improvement.
Whether you're a first time entrepreneur who has freshly graduated with a Masters In Business Analytics or a business conglomerate with years of experience behind you, staying vigilant and tracking the progress that your business is making is one of the biggest key components to long term success.
The truth is every business will experience a number of successes and failures, but only a business that is built to stand the test of time is able to navigate the often murky and unpredictable waters of the business world.
In today's article, we look at the top five ways to effectively track your business' progress, so without further ado, let's dive right in!
1 Analyse your financial statements
At the end of the day, owning a business is about turning a profit which is why the first and most important step when it comes to tracking your progress is to analyse your financial statements in depth.
The three main financial statements you will need to analyse are the income statement, balance sheet, and cash flow statement.
These statements will give you all the information you need to assess your financial health and are key tools in helping you make better financial decisions for your business.
In a nutshell, if you want to see how profitable your business is, check out the financial statements, pronto.
2 Performance reviews
To win the marketplace, you have to first win the workplace. Your employees play a vital, if not irreplaceable role in the success of your business and one of the best ways to measure business success is with the help of a performance review.
Performance reviews are formal assessments that evaluate an employee's work performance, identifies strengths and weaknesses, offers feedback, and sets goals for future performance.
We highly recommend conducting performance reviews once every 6 months in order to assess the efficiency of all your employees and to nip any potential issues that they may be facing in the bud.
At the end of the day, when employees are happy, they are your very best ambassadors.
3 Are your customers satisfied?
Of course it comes as no surprise that customer satisfaction is one of the best tools to help you understand both the strengths and weaknesses that your business may be facing.
If customers are dissatisfied, you essentially have a recipe for disaster that will inevitably lead to a failing business that ends before it even starts.
Doing all that you can to receive customer feedback is something that every business owner should prioritise, no matter how big or small of a player you are.
Some simple ways to find out what your customers are truly thinking is to send out email surveys, reviews or simply just asking them for feedback in person.
With this honest information at your disposal, you will then be able to make changes if necessary to ensure better customer satisfaction that leads to further business success.
4 How many customers do you have?
Aside from customer satisfaction levels, the number of customers you are attracting to your business is another incredibly important factor that will help monitor your business' progress.
If your pool of customers seems to have stagnated, chances are you really need to work on marketing your business in a more effective manner.
The first thing to look into is your repeat customers - develop a client list with email addresses that will help you track customers. That way, it will be easy to keep on top the number of new customers per month or year.
Next, average how many customers you get from each new business action, whether that be marketing efforts or the introduction of new products and/or services. By averaging your new customers every so often, you will be able to measure how successful your business is at drawing in new people.
5 Assess your revenue growth rate
Last but not least, the best way to measure whether your business is growing is with a revenue growth rate. Is your business bringing in more revenue now than it did in a previous similar time period?
Be sure to compare month to month or quarter to quarter revenue amounts to ensure accuracy.
If you're noticing this number slip, it's always a good idea to investigate why and to analyse it with other metrics.
Ideally, business KPIs that focus on revenue, profits, and balance against costs/expenditures are going to be the best indicators of your business' progress and financial health.
Running a business is tough, no doubt - but by ensuring that you stay on top of your business growth with the help of these key five factors, you'll be able to navigate your way towards success sooner rather than later.
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