Have you ever heard the phrase “what gets measured gets managed” or some other variation of the same age old quote? The phrase is pointing to the fact that when things are measured we pay attention to them. At the start of a new year, many people set goals of “losing weight” or “watching less TV”, or another arbitrary goal that has no way of being measured. Generally, these types of goals fail. For a goal to be achievable it has to be realistic and measureable. For example, “walk 5,000 steps a day” or “watch 1 episode on Netflix a night”. These are realistic and measureable. It is easy to see if you are hitting your mark because you are measuring it. With current technology, almost anything can be measured. Large businesses and corporations are data crazy, spending hundreds of billions of dollars a year. This vast amount of information gained helps businesses make better decisions and really get to know their customers.
Small business owners typically look at the basic metrics related to revenue, cash flow, payables/receivables, and net income. However, it is important to ask what is driving these metrics and how can the information gained drive business decisions to increase your bottom line? There are plenty of low cost tools and things that can be done to help your business make better decisions. Below are three things not directly related to your P&L or Balance sheet that are worth measuring.
Tracking your referral sources
What brings in your ideal customer? Is it Google, is it Facebook, a former client, a business associate, or an alternate method? As a business owner it is imperative to develop a method for tracking this information. This is key in understanding where your marketing dollars should be spent, or if a company should invest their dollars elsewhere.
Some businesses thrive on word of mouth or repeat customers. If this is your business, maybe start giving clients a card at the end of your services and ask they leave you a review on google. That is a great way to increase business without any cost.
If you have a good website and social media accounts, you likely already have access to a significant amount of data analytics tools. These include page views, time on site, likes, re-tweets, post shares, etc. and these are just scratching the surface. Using these tools that are already at your disposal are a great way to see what gets your audience’s attention. It also can give you future ideas on what types of posts you should write and what types of products get the most attention.
What are you paying your staff to do? Understanding staff productivity is crucial to the success of your business. Payroll is likely one of your businesses highest expenses. Make sure you are getting the most out of your staff. Have tools in place to keep them accountable and where possible incentivize your employees. You don’t need fancy software, excel sheets work just fine.
If you need help establishing the right metrics for your current needs or understanding how you can apply them to your business, Doss Business Consulting is there to help.