Do you know how to assess whether your business is performing well?
Well, the good news is that it doesn’t require a ton of fancy calculations and statistics; just a little comprehension of a few essential metrics. These are what industry professionals call “Key Performance Indicators (KPIs)”. Altogether, they show business owners whether a business is thriving, surviving, or just plain sinking.
White there are dozens of KPIs, we’d like to break down a few of the more important ones to help you see why they demonstrate business viability.
Five Key Metrics for Businesses
Job Average – This refers to how much your average customer spends doing business with you, per job. There are many examples of this such as the typical cost of installing a new roof for a roofing contractor. You might run a window-tinting business and would want to know the median cost of window tinting on cars or houses. Whatever your industry, job average informs you of what you can expect from customers. Then you can gauge incoming revenues, and ultimately decide what expenditures you could justify to offer goods and services.
Return on Ad Spend – All successful 21st century businesses have a budget for advertising. What separates successful from struggling companies? Sometimes, a failure to account for how much you spend (AND what you get from that expenditure) will ruin your accounting. Therefore, prudent business owners pay attention to their ad spending by testing ads (online or physical) to see how they perform. Google and Facebook advertisements, for example, have tools that allow you to conduct “A/B Testing” on different ad permutations, helping you identify the best versions.
Customer Satisfaction – There are several ways to gauge customer satisfaction. Here’s one you might already know: your aggregate review score on Google Business. Yes, you’d be surprised how much can discern from both the written reviews and the ratings (on a scale of 1-5 stars).
Close Rate – Perhaps you’ve heard the famous line “Always be closing!” Well, it’s true, and it helps to know whether your ads and other marketing lead your target audience to the finished line. In digital marketing, there are ways to capture this KPI with metrics like click-through-rate and conversion rate.
Employee Satisfaction – You also want to evaluate how you stand with your employees. Many large companies know this, and will issue employee surveys to see how their employees feel about everything from the working environment and safety conditions to salary and wages.
Do you struggle to analyze and manage metrics like these for your business?
Then you might benefit from some of our business coaching services, where we offer first-class, one-on-one assistance for businesses. It’s an essential resource for any entrepreneur interested in growing a business, buying a new one, or selling.
You can learn more about these key metrics and more when you partner with the professionals at Hallmark Business Brokers. As recent recipients of the Best of Venice business award, we know a few things about tracking business performance and implementing growth strategies. Contact us today to learn how this works by calling 941-445-4726.