If you own or run a business, you’re going to have keep track of how it is doing. Nobody wants the value of their business to keep going down on their watch, so this why most people look over their books (financials) with a fine tooth comb to look at the money coming in. They do not really pay attention to other key metrics.
One key thing here is “most” people, because rather, unfortunately, a lot of people do not pay enough attention to their financials at all. The most gutting part is that keeping very good track of the money coming into your business does not guarantee that the business will retain its current value or increase in value. To make sure your business is healthy in all areas, there are some key metrics you must keep tabs on a fairly regular basis.
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1. Cash Flow ( Your Revenue & Expenses)
Your cash flow is essentially at the core of your business and is a very key metric to monitor. Tracking your cash flow efficiently means tracking your sales, margins, your revenue as well as your expenses. Your revenue stream may seem healthy enough and may leave you thinking that the business is doing well. You should also keep constant tabs on your expenses also which leads us to the next metric.
2. Break Even Point
Looking at the break-even point of your business is very important because it allows you to set realistic goals for your business. But first of all, what is your break-even point? Your break-even point is the number of products you must sell so that your overall revenue equals your overall costs. This point should serve as the minimum goal for your business so that your business does not make a loss. The plus side is from the point you understand what you must sell to make a profit.
3. Cost Of Customer Acquisition
As you carry out your business activities you would want to keep track your customer acquisition costs. Any thriving business must be able to make a sales forecast and be able to find customers and persuade them to patronize the business in order to meet the sales forecast. You can get your customer acquisition cost by dividing the acquisition expenses like Marketing and Advertising by the number of customers over a period of time.
4. Customer Satisfaction and Loyalty
Another key metric to monitor your business in customer satisfaction and loyalty. The success of your business depends heavily on how happy your customers are with your services. This means you have to find a way to measure this so as to ensure you do not lose customers.
You can also read: Effective Customer Service: Bed Rock Of Small Businesses
5. Overall Performance and Productivity
In keeping tabs with on business, your staff performance and productivity are another of the key metrics you have a measure. This will allow you to understand the true productivity of your business and its overall health. You can spread the productivity measurements to various departments live sales, support and manufacturing.
The main goal in running your business is to see business growth and for this to happen you’ll need to look at these metrics and if need be look for ways to improve on them. As the end the first half of the year is just around the corner evaluating your becomes increasingly important. This will assist in making decisions as to with what systems to stick with and which ones to adjust, so the next six months are the better part of the business year.