It doesn’t take a wizard accountant to determine a small business is successful due to its financial solvency. In other words, if your books are running in the black, you can call your small business a success. And while financial indicators are important, they’re not the sole metric of a successful small business.
The ways in which your business grows are nearly as important as its financial health. Let’s examine a few growth metrics to consider alongside your black and red ledger.
Before we move onto other growth metrics besides fiscal wellbeing, we need to examine cash flow first and foremost. If your business is not regularly bringing in sources of income, it won’t last for very long. But, if the business is in its early stages, this might be hard to determine. If red ink is too prevalent in your spreadsheets, make sure you’re analyzing key performance indicators correctly. For example:
Are your sales numbers reliable?
Is your product priced correctly? If it’s too high, selling will be more difficult. If it’s too low, customers may get the wrong impression.
Do you have too little or too many employees?
If you're scratching your head as to why you aren't turning a profit yet, it’s time to reexamine your KPIs to determine where you may be off track.
Growth and Reliability in Sales
Steady and reliable sales is a great indicator of business success. If your sales numbers are accurate, and they’re steadily growing quarter after quarter, your business is succeeding. Keep in mind minor setbacks are normal, and peaks and valleys accompany nearly every business. But if you’re seeing explosive growth one quarter and a severe dive the next, or can’t keep new clients for very long, or have a growing loss rate, it’s time to analyze the sales process. Chances are there are patterns, processes, or hidden mistakes plaguing the success of your business.
Not all growth metrics are financial, and employee satisfaction is a major factor in the key to a successful business. Satisfied employees are more productive, stick around longer, and work better together than unhappy people. If you know employee morale is low, you need to figure out why and do what’s possible to fix it. If all your employees agree they’re not being paid enough, but you can’t afford to raise their salaries, consider adding perks like flexible hours or remote work options to stem some of the dissatisfaction.
When your customers start doing the work of your sales team by referring your business, you’re on the right path. The product and/or service you provide is earning the trust of your customers, which can turn into the most prized form of recognition in the marketplace. If you’re unsure if your customers are referring your business, an anonymous survey at the end of the sales process is a great place to start. Surveys can help you find out if your business needs to do more to encourage referrals, like offering current customers discounts, rewards, or other incentives to encourage word-of-mouth positivity.
Brand recognition takes time, but if your small business can achieve it, it’s quite valuable. You can use social and professional media to increase brand awareness, but remember your service or product must be worth its salt in order to actually grow your success. Be open to unconventional methods to boost your brand, but make sure your sales and retention process is solid.
Participating in your community builds relationships with existing and potential customers, increases brand recognition, and hopefully aids in employee satisfaction. Whether you decide to hold quarterly or yearly workshops for existing clients, join Chambers of Commerce, support local charities, sports teams, or races, these efforts all increase your visibility and help people see your business as a valuable and caring resource in the community.
Unfortunately, most small businesses are too busy to focus on more than their financial stability. But true success is measured by more than finances. By examining how your employees, customers, and community view you, you’ll likely unlock potential revenue and grow your business over the long-term.
Interested in learning how Dominion Systems can help your company?