As a business owner, you strive to do the best by yourself, your employees, your investors, your customers, and the bottom line every day. But how can you really tell if all the time and effort that you are putting you’re your business is ultimately leading to your its overall growth and success? There are a number performance measures you can implement when striving to determine if you business is truly living up to its potential. Here, we will cover several of those measures and the best way to approach them.
Performance Measures - Identifying Your Goals
What excites you about being a business owner? What do you hope to accomplish with your business? You want to lay out specific goals, while also making sure that they are realistic and achievable. Maybe you want to increase a certain product’s sales numbers by 20% in the next quarter or gain 5,000 more followers on your business’s main Facebook account before the year ends.
Ultimately, you are the one laying the foundation for your business, so knowing and being able to articulate your goals is a good indicator of the current health and trajectory of your business.
Performance Measures - Examining Financial Statements
Ultimately, you cannot successfully run a business without making money, and your financial statements are helpful performance measures, since they will let you know the rate at which money is going in and out of your business.
If you look at your income statement, you will see your business’s profits and losses during certain periods. This will determine your business’s ultimate profitability. On the other, your balance sheet offers insight into how much money you owe in costs or to lenders and how much you actually own. A cash flow statement lets you know how much liquid cash is in your business.
The information you gather from these statements will give you an idea if you are on the right path towards maximizing profits, or if you need to tweak a few things.
Measuring Your Customers’ Satisfaction
There are several ways to gauge how your customers are reacting to your business. You could have them fill out a product or customer service survey on your website. You could reach out to them via email. You could also engage with them through various social media channels. Maybe craft a Twitter poll to see what sort of new products they would like to see or run a new promotional campaign on your Instagram page.
Whatever methods you use to reach your customers, you should always have a number of questions in the back of your mind that consistently influence this customer outreach process. What do they like about your products or services? What do they dislike about your products or services? How do they feel about your customer service methods? Is there something that a competitor is doing that they particularly like? What about it do they like?
There are never too many questions you can ask when it comes to effectively measuring your customers’ satisfaction.
Measuring Your Employees’ Satisfaction and Performance
Just like you want your customers to be satisfied, you also want your employees to be satisfied. They will not be able to best serve the business or do their jobs effectively if they are not, for the most part, excited and energized to come into work every day. Not only, however, do you just need to ensure that your employees are satisfied with their working conditions, but you also have to make sure that they are effectively doing their jobs.
One of the most common ways to determine your employees’ happiness while also measuring their job performance is to conduct regular employee reviews. During these performance reviews, which should be done at least twice a year, you will want to lay out your employees’ day-to-day tasks and examine whether or not they are fulfilling these tasks to the company’s standards.
But do not just turn these reviews into one-sided criticisms. Allow your employees to assess their own performance as well as the performance of management. Make sure your expectations are clear. Let them ask questions and try to have answers ready for them. Is there anything you can do create a more conducive working environment? It could be anything from allowing for more vacation days to having more snacks in the break room.
These sort of employee reviews are great, but do not solely rely on them to communicate with your employees. Regular communication with employees, whether it be a quick conversation by the water cooler or a lengthier lunch discussion, is crucial to determining their happiness. If your employees are happy, they are more likely to perform better at their jobs, which will in turn fuel the success of your company.
If Your Business’s Performance Is Not Up to Snuff, Work to Fix Any Problems
You have implemented all the performance measures you can. Now what? Measuring your business’s performance is ultimately meaningless if you do not institute the appropriate strategies to address any performance holes or issues.
Of course, knowing what you are doing well is great too, and you want to continue to do those things that are benefitting your business’s performance. But for any problems that you identify, be quick to come up with a solution.