Profitability is probably the first thing people think about when measuring success. Is your business making money? It’s a pretty basic formula — if there is money left after you have paid your operating expenses and debt, then things are looking pretty good. However, if you find your bottom line is continually red, then your chances of success begin to dwindle.
Comparing yourself to your neighbor will only leave you wanting more in your personal life. However, a little comparison goes a long way in setting effective goals for your business. Understanding how your shop stacks up against your competitors in regards to products you carry, pricing, and customer service is key to keeping your customers satisfied.
In a Forbes Magazine article, Mike Kappel, founder and CEO of Patriot Software, suggests one method is by averaging your number of new customers.
“Knowing how many new customers you get is a great way to measure your business’s success and predict growth. If your business is stagnant with the same 25 customers, you might need to kick up your marketing strategy. See if the people buying from your business are existing customers.
Develop a client list with email addresses to track customers. That way, you can easily count the number of new customers per month or year.
Average how many customers you get from each new business action, like adding products or upping your marketing efforts. By averaging your new customers every so often, you can measure how successful your business is at drawing in new people.
And then there’s the old adage that holds up time and again: You never achieve real success unless you love what you are doing.