6 Business Essentials to Monitor
Performing frequent reviews of your business performance is essential. Think of your business as a vehicle. If you don’t check the dashboard every so often, you run the risk of lagging performance or a breakdown. Plus, you want to make sure that you check the map every so often, too.
1. Goals. Did you fall short of, meet, or exceed your goals? Why? Ask yourself “why” regardless if you fell short, meet, or exceed your goals. If you exceed your goal, it is as equally important as knowing why you may not have hit a goal so you can best leverage your success in the future.
Frequency: Every time a goal deadline passes.
2. Finances. If you work with an accountant, make sure to review your Balance Sheet and Profit & Loss (P&Ls) statement every month. See how each General Ledger (G/L) code performs to industry norms. Ask your accountant to research what percent of sales each of these codes should be at for a healthy business in your industry. How is your cash flow? Businesses show sales, but not maintain liquidity. Are your payments due to your vendors (Accounts Payable or A/P) before you receive the money from your sales (Accounts Receivable or A/R)? Even if you outsource your accounting, it is imperative that you know your finances to make appropriate decisions for your business before you get into trouble.
Frequency: Once a month, once a quarter, once a year.
3. Customer Feedback & Testimonials. You need to dialogue with your customers. They will tell you what they want. This doesn’t mean that you give them everything. But, if you are seeing a trend in their responses, you can decide if you need to alter your business. Without customer feedback, you run the risk of losing customers without any knowledge as to how to get them back. Testimonials are a great way to lure new customers in. Word of mouth is the #1 method of marketing. People believe what other customers tell them before they trust what a company has to say about themselves.
Frequency: Once a month.
4. Introspection Survey. Why would you review your Introspection Survey AFTER launching your business? You may find that your wants and needs change. Marriage, kids, maturity and other major events in your life are all things that can change what you want in your future. If you find that your wants and needs have changed, make appropriate alterations in your business as quickly as possible.
Frequency: Once a year.
5. Target Markets. Markets can change quickly. There are a number of outside influences that you need to be up-to-date on – the economy, new competition, new customers, new products or services, technology, customers’ buying habits, and whether your target market shrinking or growing.
Frequency: Once a quarter.
6. Products & Services. Are the products and services that you offer performing the way that you intended? Did they fall short of, meet, or exceed your projected Return on Investment (ROI)?
Frequency: Once a quarter.