How do you measure business success? It’s an important question to ask because there is no single answer. There are so many different tangible and intangible measurements that can be used to gauge success.
A lot of business owners will simply measure the big fish: revenue and profits. Yet the success of a business isn’t simply determined by how much money it generates. There are other aspects of business analytics, such as employee wellbeing and customer satisfaction, that should also be measured.
One-time measurements are also no good. The business world is an unpredictable one. In fact, there’s only a single point that can be predicted: everything in business continuously changes.
As a result, you need to measure the performance of your business frequently. If you fail to keep on top of this, you will miss out on valuable business analytics insights. You always need to be aware of what is working with your business. The same can also be said for any elements that are flagging and turning away trade as a result.
At this stage, it’s a good time to return to the initial question posed in this article: How do you measure business success?
Have the right skills in place
Before getting down to measuring stats and data, it’s important your business has the right skills and structure in place. There’s no point diving head-first into business analytics without any kind of plan; otherwise, you’ll get lost in a sea of figures and information.
To do this right, there are a few aspects to consider:
Earning a master’s degree
It might seem like this article has gone from 0-60 at an alarming rate. However, a master’s degree can be massively beneficial for getting your head around business analytics. You are probably thinking: ‘I don’t have time to run my business and study for a master’s degree.’ In a traditional sense, you would be right.
Yet online learning has made the whole process of gaining a master’s degree all the more attainable.
For instance, you can earn an online master’s degree in business analytics from St. Bonaventure University while you continue to oversee your business operation. The business analytics course is flexible, which means you can alter it around your daily work schedule. As an example, you could complete your usual workday and then study for your online master’s degree in the evening. Plus, you’re the boss – you could even sneak in one or two revision sessions during any quiet periods for your business.
While there are many advantages to studying for an online master’s degree – including reduced cost, the ability to complete courses quickly, and the option to jump in without prior experience – the main one for you is gaining an understanding of business analytics.
Actually, an ‘understanding’ is underselling the quality of education from a business analytics master’s degree. By the end of the online master’s degree course, you will be an expert when it comes to analyzing and measuring data. You will learn everything from utilizing statistics to solve business problems, to implementing technology to deal with more complex issues.
Perhaps the best bit about this online education: you are essentially learning on-the-job. Once you pick up on something from your master’s degree course, you can then incorporate it into your business. The longer you go on with the business analytics course, the better it will be for accurately measuring business success.
Bring an expert on-board
If you are too stretched for time to enroll on an online business analytics course, you can hire an expert to do the job – assuming you have the spare cash to bring an extra employee on-board, of course.
This does have one main advantage over learning about business analytics on your own: you are receiving expert advice ‘straight out the box’. Plus, it also leaves you with extra time to cover other areas of the business.
Alternatively, you could even train up one of your current employees to handle the analytics side of the company. Just remember: never overlook the importance of analytics. If the data is incorrectly evaluated – such as getting a customer trend prediction wrong – this could lead to your business, making a large financial error.
Use the right analytic software
Although no package covers everything, it is essential you use the right analytic software to measure performance. Some of these include:
- Google Analytics: When it comes to web analytic tools, this is usually the standard-bearer for businesses. As well as being free to use, Google Analytics provides comprehensive information about your website traffic. You can see how many visitors you receive, what areas of the site they are attracted to, and your sale conversion rate.
- Microsoft Excel: Due to the number of powerful features it possesses, Microsoft Excel has long been utilized by organizations to analyze data. Along with being able to list data in an easy and clear manner, you also have tools such as ‘What-If Analysis’ and ‘Solver’ – both of which can help to determine how to solve any existing problems.
- Sisense: Self-described as the “industry leader in business intelligence for complex data”, Sisense offers a comprehensive analytics package. Its robust system often sees it topping lists for the best data analytics systems on the market, and for a good reason. Despite having a wealth of technical features, it is all presented in an easy-to-use fashion where even non-technical users can utilize the system. Data can be filtered, explored, and mined within a matter of clicks, giving the answers you seek from the inputted data.
The key elements your business needs to measure
Now you know how to measure your business success, you need to understand which elements of the company need to be measured. After all, there are many different components that can be analyzed in one form or another.
The rest of this article will cover the key aspects your business needs to measure:
Finances and profitability
The most important measurement for most businesses is also the most obvious one: finances.
You need to keep a constant eye on your finances for a number of reasons. To begin with, it’s vital you have enough money in the bank to pay for all expenses. If you cannot cover your suppliers, employees, and any other outlays, your business is effectively done.
Simply staying afloat and paying off your expenditures is also not good enough. Your business needs to be profitable. Not just so you can take a wage packet home, but also, so the company can grow. As the saying goes, ‘you need to spend money to make money’.
Thankfully, your financial performance is easy to check and analyze if you use specialist accounting software.
If you want to sell your products or services, you will need to market them effectively. Potential customers won’t simply come across your business randomly. They need to be led there with advertising tactics that work.
The word ‘work’ is the tricky part when it comes to marketing. There are many different promotional techniques a business can use, that it’s easy to become muddled and attempt to throw too much at the wall. In addition, certain marketing options simply don’t work as well for certain businesses when compared to others.
Thankfully, you have the power of analytics to check if your marketing efforts are working or not. At least, that is true in most cases.
For example, it is simple to check how effective your social media is as a promotional device. The likes of Twitter and Facebook have their own built-in analytics, which allows you to measure the likes of impressions, media plays, click-through rate, and so on.
When it comes to ads and other marketing tools that directly lead to your website, this can typically be measured with your site and Google Analytics. At the very least, you will be able to check how many people clicked on the ad to reach your website.
Traditional marketing is where measuring can become difficult. For instance, how can you tell if a leaflet has led to people visiting your business? You could always ask your customers, but this is ineffective. What you can do, however, is place a unique URL or QR code on the leaflet. Then when they use the URL/QR code, you will know exactly how many people arrived directly from discovering your business via the leaflet.
Repeat customers are integral to small businesses. Due to this, you have to guarantee they are fully satisfied with the products and services they receive. If you go above and beyond, your company could even benefit from word-of-mouth.
The question is: How do you measure customer satisfaction? Well there are a few ways, including:
- Reviews: The most direct form of feedback is with reviews. This is the space where customers are free to comment in whatever way they desire about your business, good or bad. If you receive one too many negative reviews, see if there is a common theme across them. If there is, you will know there is an issue that needs correcting.
- Surveys: You can send surveys to your customers via email. You have the option of including multiple questions, which can cover all aspects of your customer service experience. People don’t typically like going out of their way to complete surveys, so you might have to entice them with a little treat. This could be an exclusive discount code or a free small gift.
- Ask directly: If you run a traditional brick-and-mortar store, you will have customers walking around the premises. This means they are primed and ready to be asked questions. Obviously, you don’t want to be overly pushy or forceful with your questioning, but you could break the ice with an easy opener such as, ‘Did you find what you were looking for?’
Overall efficiency is an aspect that can be overlooked when compared to other measurable elements of your business. Yet the more efficient your company is, the more you will reduce costs and enhance profitability.
To make changes to efficiency, look back at the past quarter and see if you can identify any areas that are slacking. This could be everything from ineffective employee performance to stock not being shipped out quickly enough.
Employee wellbeing and growth
Forget about everything else: your employees are an essential part of your business (sole traders excluded). If you don’t have your employees present and working, you’ll have an incredibly hard time attempting to keep your business running – let alone trying to grow it.
While not quite as drastic, if your employees are unhappy and disillusioned, they are not going to perform to a high standard. This could result in your business, not functioning as expected, which could negatively affect everything from sales to customer satisfaction.
To eliminate this from being a problem, conduct regular performance reviews. This will give you a chance to take a closer look at their workload and happiness. For instance, an employee might be frustrated; they have too much work to do – or vice versa.
In addition to performance reviews, give your workers a platform to voice their opinion whenever they feel the need to be heard.
Change with the market
To stay ahead of the curve, you always have to keep up-to-date with the current market and attempt to spot upcoming trends. This can be done by checking the profitability of your business. If there’s a worrying downturn that you cannot explain, this could be due to a sudden shift in the market.
If this happens, you might have to revitalize your current product line by introducing new items. Don’t be too hasty in making such a big change – the blip in sales might only be a temporary occurrence.
If you want your business to thrive, it’s vital you are able to measure its success accurately. By doing this, you gain an insight into what is – and isn’t – working with your company.
As seen above, there are many different elements to measure. While it can be tricky to track and analyze all of them, doing so will improve the overall quality of your company. Just remember: the more insight you gain, the better it is for your business success.