Most business owners and managers have heard of the fabled power that metrics can have on the success of your business over the long term. Boosted profits, a larger consumer base and infinite possibilities for expansion lie in wait for those with the foresight to put their company’s metrics to good use. However, there are as many sources from which you could choose to pull metrics as there are facets of your organization to manage or improve. So, which types of metrics are most important for your business?
This question goes unanswered (or ambiguously so) far too often – causing businesses around the world to waste their time and costing them money in the process. The best answer that can be given is multifaceted; all of them and none of them matter most. Basically, it depends on your own specific goals.
All metrics have the potential to influence your next big business decision, but only you can decide what direction you actually want your business to move in. When it comes to smaller businesses metrics work similarly, but certain types are bound to be of more importance to the grand majority of owners and managers than others. Here, we will go over some of the most valuable metrics from the smaller business perspective.
Financial metrics are plentiful in the world of business, as are the incentives to actually keep track of them. Suffice to say that quite a lot stands to be gained from placing the necessary importance on these figures and watching them closely. Many important aspects of business performance are largely predictable on the basis of finances and financial figures alone, so do not set your bank statements out of reach.
The most important metrics for a growing business to keep up with regularly in this area of business operations are the gross profit margin, net profit, and current ratio.
The gross profit margin is ideal for determining proper pricing for your goods or services. The net profit of your business, or your “bottom line,” is the final wad of cash you are left with after all bills, payrolls and expenses have been attended to for any given time period. Your current ratio is the best way of determining whether or not your company’s expenses can reasonably be paid.
These are easy enough to identify amongst other types of metrics, but only a few are particularly important to owners of small, growing businesses. It can be nice to pay close attention to the amount of Twitter followers you have, but the true value comes from the macroscopic perspective more often than not. In other words, it helps to zoom out as often as possible when it comes to these figures and keep track of the big picture. See the forest for the trees; keep your goals in the forefront.
Ideally, you should be focusing on the overall number of leads you are actually converting, the total amount of money you are making per person and the relative amount it actually costs to gain each new customer. Additionally, it can be helpful to monitor the number of repeat customers you are getting.
Human Resources Metrics
The way in which your company goes about managing its talent is crucial to its sustained success and growth. You simply cannot expect your business to consistently grow without holding on to and bettering its top employees. Certain measurable factors can help a smaller business get an accurate handle on its HR situation and improve upon its current practices.
Turnover and general performance metrics are likely to be the most pressing figures to keep up with. Turnover pertains to the actual supply and demand for manpower within your business. General performance metrics could be specific, as in sales performance or division productivity, etc.
Metrics lend credence to your ideas – giving you the underlying, real-world data that you need to keep your plans grounded. Without metrics, your plans are much more likely to be off-base and inconsistent with the current needs or reach of your company. As businesses continue to transition into the new age of digitally-enhanced business practices, we can count on seeing even more small businesses making use of metrics and analytics in powerful new ways. This article only mentioned the primary metrics sources that growing companies tend to focus on, but pretty much any measurable aspect of your businesses performance or operations can be converted to useful data and analyzed.
As your company gains traction on the local or even international market, you will likely find additional uses for augmented metrics stores to further improve its performance. As far as good solutions for getting started with metrics and analytics within your organization go, you should give OpenText Analytics and Optimove a try to see what you can accomplish right now.