You can define success in many ways. And how you define the success of your small business is unique to you. However, there are some universal ways you can make sure that your business is growing and moving in the right direction. Here’s how…
Revenue
The revenue of your business is the income that comes in. In this respect, it doesn’t matter how much goes back out again, the revenue is the total amount of money that comes. If you notice the amount of money that is coming in is increasing, this can be a sign that your business is doing well, especially if you know that the products and services that you offer cost you a small amount.
Increased sales
Sales may be one of the first places that you notice a change in your business. Your products start to sell. Or, if you have a digital product, you may notice it climbing the charts.
These sales are exciting, right? If you sell in a number of different places, you’ll see that each outlet will rank sales in its own way. This too can give you an indication of how many sales you are making.
Increased profits
Profits are different to revenue. So checking your accounts on a regular basis is important. This will tell you whether your profits are increasing.
Keep in mind, your revenue might stay the same. This can happen if you’ve found a cheaper supplier but sales remain the same. Your profit margin depends on a number of factors, including revenue and product cost. So make sure you review them regularly.
OKRs and KPIs
A KPI – or Key Performance Indicator – is a small and attainable goal that you check on a regular basis.
OKRs are the same idea except they are more aggressive with objectives and key results. Using these two pieces data you can measure how your business is doing and if you’re making progress towards those goals.
They also mean you can adjust if something isn’t quite going to plan.
Your business plan is being followed
When you launch a business, you put a business plan in place to kick-start that growth. Plus, you should also pop a couple of projections in there, too.
If things are going well, you’ll hit these projections (and may have not noticed). Every once in a while, it’s good to get the business plan out and check in on how you’re doing compared to the projections.
However you decide to track your success, the best thing you can do is be consistent with your tracking. So, if you are using profit margins one month, don’t abandon them the next to track sales. Plus, you can always use everything suggested here for a good overview of your progress.