Paying attention to the relevant metrics for your business is crucial to improving your overall success. Enabling you to link operational and individual performance to other factors that contribute to your success, you’ll also know your company’s true worth and have a better understanding of how to run your business. Companies will naturally change goals and objectives, and the set of metrics that you’ll need to analyze will often change accordingly. This helps guide decisions about business plans and correct errors that hinder companies from flourishing. There are a few key metrics that help analyze the performance of a business, and while they might not all be applicable to your company, these are important for most:
1. Customer Satisfaction. No matter how many different services your organization offers, measuring customer satisfaction in each should be at the top of the list. Measuring their satisfaction in each avenue will, over time, identify services that could benefit from some modification or customer service changes that could improve the customer experience.
2. Employee Satisfaction. There is a direct link between satisfied employees and company productivity. Satisfaction surveys could benefit employees who aren’t very vocal about their needs and can help you make improvements that are important to get them working at their highest potential.
3. Productivity. This is all about the overall goals of an individual business. This could be the number of sales you expect to make in a given time period or the successful launch of a product. Seeing how long it takes you to reach your goal versus your expected time will aid you in seeing how productive your process really is.
4. Operating Cash Flow. This is the total amount of cash generated from operations. It includes the amount totaled after factoring in income, depreciation, and adjusted for changes in working capital. Cash is important for running day-to-day operations, and once you are generating enough to exceed expenses, then you can be sure to use the same processes to keep the business progressing or allow changes that might be holding you back.
5. Gross Margin. This is the best indicator of how healthy your business truly is. The percentage of sales after incurring direct production costs, the higher the number, the better! By increasing sales and ensuring that your operation is running efficiently, you will even be given the opportunity to decrease sales costs for the consumer if you choose.
Business success is more about facts and figures. You will need to analyze every aspect of your daily operation to ensure that you are doing what is needed to be successful, but by using the right metrics, you will empower yourself by studying the right things that will ensure your upcoming success!
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