How to Track Your Company’s Performance for Long-term Success
Economic, social, and political factors are constantly changing the business landscape and the only way to stay ahead of the game is to regularly measure your company’s success. Effective business owners know how critical it is to regularly measure their business performance. Tracking and measuring business performance may take time and patience, but it pays dividends in today’s economy. Following are five of the most effective ways to measure business performance.
1. Assess Customer Satisfaction
An important first step you can take to assess your business performance is to survey customers. If you have recent customer survey data, evaluate it for both positive and negative feedback. Pay particular attention to customer comments about things in your business that are not working well. If your business does not have any customer feedback, or it has been more than a year since you have taken a survey, you may want to consider launching an online poll. Ask customers to rate their recent experience and provide comments on specific actions you could take to improve customer satisfaction.
2. Understand Customer Acquisition Cost
If you continue to have a static customer base, or you are spending too much on marketing to acquire new customers, work on reducing your customer acquisition cost. Reducing customer acquisition cost can be as simple as retargeting customers, automating marketing, and offering affiliate programs. Business owners who track detailed information on customer acquisition costs are better equipped to pivot to new marketing strategies and effectively utilize their marketing budget.
3. Analyze Financial Statements
Evaluate all available financial statements for the business to determine where the cash is flowing. First, assess the cash flow statement, which will give you an idea of how much cash you have readily available as liquid assets versus how much cash you have tied up in assets. Next, examine your income statement to determine your profits and losses. Finally, evaluate your balance sheet, which gives a snapshot of your overall financial health. Compare your current revenues, expenditures, and debt to the same time last year.
Related: What Are the Best Ways to Improve Cash Flow for Your Business?
4. Evaluate Key Performance Indicators
If you have a business plan with established metrics, evaluating your key performance indicators will be a simple exercise. If you have not yet established key performance indicators or key performance metrics, start by asking employees and customers for input. Focus on measures that are simple and cost-effective to track, including time to fulfill orders, sales conversion rates, and growth in revenue. Once you have established key performance indicators, make sure to compare them monthly and quarterly.
5. Monitor the Competition
Regularly read articles and stay current about other top-performing companies in your industry. Monitoring the competition is an excellent way to determine if there is an industry-wide lull or if specifically your company is experiencing difficulty. Staying competitive may require starting a new marketing campaign or something more involved such as introducing a new product line. Depending on the size of your business, you can assign an employee to regularly track and evaluate the competition so you know your business is keeping up with industry leaders.
The Bottom Line
Continuously evaluating your business performance is critical to your long-term business success. Regularly monitor customer satisfaction, customer acquisition cost, financial statements, key performance indicators, and evaluate the competition. Adjust your business strategy depending on your performance indicators. Establishing and monitoring business performance takes time, but it ensures staying power in your industry.
Improve Your Company’s Cash Flow
Whether your business is thriving and you can’t keep up, or you are waiting on clients to pay, Universal Funding can help your growing company. Call us at 800.405.6035 or complete our rate form today to learn more about invoice factoring and how it can improve your company’s cash flow.
About Universal Funding
Universal Funding is a nationwide invoice factoring solutions leader, supporting growth-focused businesses with scalable factoring solutions. With its invoice factoring, payroll funding, and purchase order financing services, Universal Funding provides clients with the working capital needed to grow and support their businesses without taking on new debt. Ranked as one of the nation’s top invoice factoring companies, Universal Funding provides cash flow financing for businesses all across the United States.