Measuring Your Business Success
When you plan your new business, be sure to include ways to measure your success from the first moment. In the start-up phase of your business, you don't have customers and you don't have revenue so, in the first days, there isn't much that is measurable. You will need to devise other ways to gauge your progress.
When you first get started your time is consumed with tasks that are hard to apply as measures of success. Your beginning hours, days, and weeks are committed to finding customers. As you find customers, you need to perfect delivery procedures, develop additional methods for finding customers, and hold on to enough cash to keep your head above water. At this point you don't have many systems in place to help you with these tasks so the weight of the business is resting squarely on you. You and the business are one and the same!
It's important to have some measure of success in these beginning weeks. If you can't see that you're making progress, it's too easy to get burned out and dump the whole idea. Your criteria can be anything that shows the growth of your business, such as the number of new customers each week, the increasing sales volume, or the growing percentage of expenses that is being covered by your revenue. What ever you choose, make sure it makes you feel good about your efforts.
After the start-up phase, there's a little more to use to measure your success. Now, the income should be coming in on a more regular basis and there should be enough to cover expenses and renew assets. There may not be a profit yet, but as long as you are covering all expenses and costs of growth, then you can use this as a measure of success.
Your accountant will have ideas on how to measure your success, but there is a greater measure that you need to apply. Are you achieving the goals you set for yourself and your business? The numbers are relevant, but the achievements are crucial.
As you continue in this phase, you will start to realize a profit. You will probably start to live on the income from the business. Many businesses stay at this level, providing a comfortable living for the owners without increasing the size of the business. After you reach this phase, you will be faced with a decision to grow the business, leave it as it is, or sell out. Whatever you decide, you will now have the resources to determine if the business is truly successful but you won't make it to this phase if you don't measure your success from the beginning.