If you have just established your business, there are several things that you will keep learning over time that will help you with scalability. On that note, to track the success of your business, you need to establish business metrics first. These business metrics are also known as KPIs, which stand for key performance indicators.
The KPIs exhibit measurable values that will help you assess the progress of your business goals.
The following strategies can help:
Set Business Goals
Before you do anything, you should start with setting business goals. Establish the things that you want to achieve. Business goals vary from business to business and could include the following aspects:
- Boost traffic on your website
- Boost customer satisfaction
- Get new customers
- Boost sales
- Get more leads
Your business goals can also include the goals of getting a bigger market share or boosting production efficiency; speaking of which, it might be in your best interest to integrate a Producting Monitoring Software and leverage the power of technology to produce quality products and ensure customer satisfaction.
Nonetheless – you get the point. To track the progress of your business efficiently, you need to establish your business goals first.
Measure KPIs
Now that you have established your business goals, your next step is to start measuring the KPIs. All businesses have established KPIs to assess their success rate of reaching their targets. This way, KPIs measure the percentage regarding how effectively a business is reaching its goals.
After you have set your goals, you will be setting KPIs and developing effective strategies that will steer your business in the right direction and help you with the evaluation of your progress. This way, you will also set up a historical record that you can assess your business performance at any time.
When it comes to measuring KPIs, there are two types of measurements: financial and non-financial.
Speaking of financial measurements, make sure to conduct a financial review of your business regarding the following financial aspects:
- Cash flow
- Working capital
- Cost base
- Sales growth
- Liquidity ratios
- Financial leverage
You will also want to measure profitability, as this is a crucial aspect of your business progress. Most businesses focus on boosting profits and boosting ROIs. If you can relate, you should focus on measuring your business profitability in terms of operational margin, gross profit margin, and net profit margin. Also, don’t forget to measure the return on capital.
Assess Customer Retention
To measure the progress of your business, you should assess customer retention and loyalty. Speaking of retention, you should make active efforts to retain your employees, in which case, we recommend maintaining effective communication between the different departments and managerial authority.
Also, when it comes to assessing customer loyalty, start with understanding your customers first. The thing is that the more you know about your customers, the easier it will be for you to retain your customers and bring new customers on board.
Make sure to regularly collect customer feedback so that you can effectively identify the areas that might need some improvement regarding your business procedures, products, and services.
Founder Dinis Guarda
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