This month, our business networking group discussed ways of how to measure business or financial performance. This was a great discussion and revealed many new benchmark ways business owners are using to monitor the performance of a business or financial lives.
- Look at your profits and numbers, do this at least monthly or quarterly. Remember it’s important you know why your business exists and that is to make a profit.
- Count and track leads. Do this as simply or as complexly as necessary. It may be as simple as writing on a calendar or perhaps using software.
- In the process of following leads, you should also be a measuring the successes of conversion.
- One business owner counts productive hours of each week and compares them to his total revenue for the week, thus gaining an idea on his return on a productive hourly time.
- Counting the number of referrals you get. Simply put if you’re getting referrals it is a sign of success in your business. Furthermore you should be rewarding these referral sources.
- Doing surveys and monitoring feedback from your clients is a great way to measure your business performance. A simple online tool to create and send surveys to your clients is survey monkey.
- When you lose business even though this may disappoint you, you must find out why you lost the business. Doing this can stop you from making the same mistake and retaining more of your client base.
- Having general benchmarks such as 3 new clients per week or having a sales budget.
- Checking your debtors and payables weekly; Make sure your debtors are in control to boost cash flow. Be proactive if you are being a slow payer to any supplier to let them know what is going on and to protect your furniture reputation.
- Often simple things happening in your business are the indicators that your business is growing, this might be as simple as being more filing cabinets or making big orders.
- Find out why you were winning business. Make it part of the induction process of a new client to ask all flesh out reasons why you won the business with them. This can give you an edge in future sales conversions.
- Know your conversion rates and at different parts of the business as well or staff.
- Measure the success of different product lines and conversion of different product lines as well. Be decisive in managing the effectiveness of product lines in future stock orders.
- Compare this year to last year. For instance look at your year to date profit in a particular month and compare it to the same period profit in last year to analyze if you are growing. You may also notice trends or weaker months you have performed better in.
- Have a way of monitoring your businesses workflow management. A simple example is a builder may wish to look at their starts, handovers and contract signings. Look and manage for bottlenecks or signs of work running out in certain areas or too much work in certain areas. Often your workflow software may be able to give you an idea of the status of the work in progress.
- Where possible get face-to-face as your chances of conversion will dramatically rise compared to for instance an e-mail quote.
- Listen and look out for interesting your products or buying signals in common conversations with people even if it is not in your business place. For instance a real estate sales agent may take note of you saying your mum needs a smaller house.
- Gaining testimonials or positive reviews. It may be a goal of the business to raise these and have systems in place to guide them into happening. Before and after pictures are a way to do your own as well.
- Measuring your personal net wealth is also important. Basically are you getting richer every year. If not ask yourself why or find out. Are you devoting enough energy into investing.
- And of course do not forget lifestyle goals, some of the ones which we think are the most important. Such as being happy with our new car or clothes or house we live in.
For a review of your business and the way you are measuring your performance contact Tax Accounting Adelaide on 08833744600.
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