Ways to Benchmark your Business
For many business owners, determining the success of a business comes down to how much profit the company makes. Of course, finances are an important measure of a company’s overall success. If you don’t bring in more than you spend you won’t be in business for long. Profit, however, isn’t the only important benchmark by which to measure your business.
There are other important factors business owners can and should evaluate to determine how well their company is doing now and to predict its future success.
Measure customer satisfaction
Customer satisfaction tells you a lot about how much repeat business you can expect. If customers are satisfied with the products and services they receive from you, they’re likely to come back and refer you to their friends.
If they aren’t satisfied, they might never come back.
Take the time to measure customer satisfaction. You can ask in person, or send out surveys or reviews. Take pleasure in positive feedback. When customers suggest areas for improvement, listen to them. Even if they weren’t fully satisfied with their experience, customers value feeling heard. If you can take their criticism and make constructive changes, you may bring some customers back.
Measure the number of new customers
Repeat customers are great for your bottom line, but you can’t rely on them forever. Their priorities or financial situation might change. They might move away or no longer need your services.
That means that if you’ve had the same 20 customers for the past few years, you need to start looking for new business.
The best way to track customers, and determine how many new clients you draw in, is to develop a client list with email addresses that you can check. A loyalty program can help you determine which clients are repeat customers and which are new, and it can even help you develop your email list.
You can also offer a referral program in which existing customers bring in new business and receive a gift for doing so.
Measure employee satisfaction
Profits and happy customers are vital to business success, but so are satisfied employees. How happy your workers are is an important benchmark to keep track of because it tells you how motivated your staff is, which can affect customer satisfaction. It also helps you predict staff turnover rates.
Conduct regular performance reviews to determine your employees’ strengths and areas of improvement. Use the reviews to determine how satisfied your employees are and how they could be more fulfilled in their roles. They may want more responsibility—which in turn can make your job easier and make your business more efficient. Or they may need more training, which can improve your customer service.
Offer professional development and opportunities for growth. Just as it’s expensive to bring in new customers, it’s also costly and time-consuming to find, hire and train new staff.
Naturally, your finances tell you a lot about how successful your business is. Keep track of your financial health and know your income statement, balance sheet, and cash flow statement. If your business isn’t profitable you may need to make some changes to keep it going.
On top of that, however, you need to measure how satisfied your customers and employees are and how many new customers you bring in to determine your current and future success. Luckily, those are fairly easy to determine.
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