Success is a relative term and does not only mean different things for different people but also different things for different businesses. What makes success even more tricky to measure or define is that it also changes over time or circumstance. What could be a success today might be underperformance the next.
As an entrepreneur, the one thing that you want to see is growth, but that growth does not necessarily mean that the bank account is filling up nicely. So how does one go about measuring success in business?
Looking at the business’s financials
Obviously, business financials are a good indication of whether the business is successful or not. No business can survive without money and no business can grow with it either. But when looking at the money, one must focus on all three the major streams or trails of money, the income statement, the balance sheet and the cash flow statement.
The income statement shows you how much money the business made over a period. It indicates the profits and losses of the business and gives an indication of the measure of profitability during the specified time.
Most entrepreneurs who are new to the game will place a very high value on the income statement and can tend to forget about the balance sheet.
The balance sheet is one of the most important financial indicators seeing that it depicts the health of the venture. It measures how much you owe and how much you own. A successful entrepreneur will home in on the debt of the business and strategically align it with the income statement to pay off the debt as soon as possible while still making a profit.
The cash flow of the business shows the state of how liquid the cash in the business is. When there is a cash flow problem, it can cause some serious strain on the other two financial aspects and ultimately lower the success of the business.
As the management writer for write my essay service puts it, “being successful does not necessarily mean that the business is debt, free, but rather that the debt repayments can be made without constraining the cash flow.”
When a customer has a bad experience, they probably will not buy from your business or use your services again. As an entrepreneur, you will know how important customer satisfaction is. Not only does it indicate that the business is doing well, but it is also a reflection of your efforts.
There is a certain pride involved with customer satisfaction, especially if you have poured everything into your business. To get a bad review or to deliver bad service, is like a slap in the face and an attack on your character.
It sometimes happens that bad experiences go unnoticed and this is only because it was not picked up and dealt with. There are many tools available that will help the young entrepreneur to measure how satisfied the clients are.
Surveys and questionnaires are excellent tools that provide an in-depth quality check of your products or services. The review does not necessarily have to be bad to make improvements.
Reviews are very specific and when a bad review is received, it should be dealt with immediately. A bad review could be turned into something positive if the customer feels as though their concerns were heard.
These reviews could also be posted on the company website so that people can see that real people gave their opinions. When you see mostly good reviews and positive surveys, it is a good indication that the company is successful.
The new clients that come in
A successful business will show gradual growth over time. When a business is turning a profit, it generally means that it is good health and successful. However, when the profits stay stagnant, it means that the business is not growing. New customers are a much more reliable indicator of the success of a business.
When you know how many new customers you get, you can measure the success and projected growth of the company. On the other hand, when the same old customers keep you afloat, then it might be time to invest in a marketing strategy. Customers come and go, but if there is not a general influx of customers, they will only end up going.
To see if new customers are supporting you, draw up a client list with email addresses to see if your sales are limited to existing clients.
The statistics writer and researcher at the essay writing service says that once you have a client list and a system in place, you can measure how well your marketing strategies are doing. Every time you launch a new product or run a promotion, you can run averages on your customers and establish which strategy is the best for bringing in new clients.
A business can only sustain growth if the people who are doing the work are doing it well. As a young entrepreneur, you might not have too many people working for you, but as your business grows, so also will your list of employees.
One way to measure the success of the business is to see how well the staff are doing. When they are discontent, it could spill over into the quality of their work and threaten the customer experience.
Running performance reviews is an excellent way of finding out where the bad spots are. Many entrepreneurs fail to do performance reviews because they do not want to step on the toes of the employees. The thing is, if they are not made aware of the areas where they lack, they will never know how they can improve.
It also serves as a morale booster when there are performance bonuses on the line. Nothing puts a smile on the faces of employees like money in the bank.
Stay on top of market trends
A successful business is one that keeps with the times. Technology has changed everything in the world, and it continues to change every industry. When your business is successful, it does not mean that you can relax and keep on with the same recipe, expecting the same results.
Unfortunately, you need to keep up with the times and the best way to do this is to see what the competition is doing. If your business is aimed at service delivery and you do not apply the newest techniques, then you will start to see a decline in profits.
Look to yourself
There is a bit of subjectivity involved in measuring the success of a business, which is why you should measure what your business is doing against your own expectations. It does not matter how well it is doing on paper.
If it does not meet your expectations, the business could still be unsuccessful. You need to be content with the growth of the business and if you are not, then a new plan can be drawn up.
The success of any business depends on so many factors that it is hard to put it all into one category. The main thing to remember is to continuously evaluate the state of your business and track where things are going well and where there is a need. The more you tinker with the things you do not like, the more successful the business will become.
About the Author
Tiffany Harper is a freelance writer from New York. She loves to share her experience through blog posts. She began writing from the professional writer service for Write my essay and later for buy college papers. Please do not hesitate to contact her on twitter.