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Measure Business Progress Every Day

Small business success requires knowing how a business is performing. Tangible measures of success should be evaluated every day.

We Get What We Measure

There are many adages in business, some of which are true, while others are simply colorful ways of expressing items that should be common sense. One truth in business seems to be that we get more of whatever it is we measure. If, for example, customer service representatives are required to respond to a minimum number of queries each day, they will strive to do that. If the quality of the interaction is not measured, customer service may be poor, even though it is accessible. In this case, we get exactly what we measure, and no more.

The tendency to meet established standards is commonly found in business environments. That is why defining the proper standard is so important to the long-term success of a small business. In the example above, measuring the satisfaction of customers could be a more effective way to meet the goals of the business. Customers may prefer to have their concerns fully addressed, rather than quickly reach a customer service rep who is simply trying to maximize the number of contacts they complete.

Fully Define Success

The best way to ensure the success of your business is to create systems that measure the most important functions your business performs. Accounting tools may seem impersonal, but may be among the most useful tools to keep your business on track.

The progress of a business can be evaluated daily with measures related to sales, expenses, and profits. Satisfactory customer service should lead to increased sales, otherwise there is no reason to provide the service. It is important to focus on what can be measured, rather than abstract goals like “being the best business,” which creates a potential distraction.

Author:

Michael Carr is a small business expert who has been involved in the successful development of three small businesses.