How do you measure business growth?
Growing your business can be fun, challenging, rewarding and all-encompassing. It can also feel frustrating, never-enough and like spinning your wheels.
An interesting question to consider if you have aspirations to expand is: how are you measuring growth?
There’s the traditional metrics of using revenue and profit. Those are great measures.
However, measuring growing using only the metric of growing top-line sales is using a very narrow lens.
AND these metrics are lagging indicators. They are the result of the activities you’re engaging in.
What are your leading indicators? (These are the actions you’re taking that LEAD TO the results you’re looking for.)
Consider your health. If you want to feel healthy and strong, that’s an end result. A lagging indicator.
The leading indicators are aspects like the exercises you’re doing, the food you’re eating, how much sleep you get, and how you’re taking care of your mind and soul.
These are the aspects you can control and if you engage in them, you have a good chance to reach your goal - your result of feeling healthy and strong.
Looking at YOUR leading indicators for your business growth is a wise place to create your strategies.
What do those look like?
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The number of client appointments or quotes/proposals you can generate: Focus on differentiating your business through your marketing messages and focussing on what your customers really care about.
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Increasing scalability. Structuring your product or service so it can grow, not by you putting more effort into it, but by the team and systems you put around it.
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The percentage of recurring revenue you’re able to achieve. Structure your revenue streams so that they can be as predictable as you can make them, even a percentage of it. This would involve looking at ways you can implement recurring revenue into your business by structuring your product/service or an aspect of it that customers want to pay for consistently.
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Measuring your customer diversity. Tracking to ensure not one customer or your top 5 doesn’t comprise a significant portion of your revenue. The litmus test: if they took their business elsewhere, what would happen to your business? Would you survive easily, take a hit but recover, or would it put you out of business? Creating diversity amongst your customers so you reduce your risk if any one customer decides to take their business elsewhere is a wise move, and tracking this can ensure you’re taking the right actions to acquire new clients. And ensures you are minimizing your business risk.
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Team growth: Building support and capacity in your business.
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Increase the number of returning or repeat customers: considering what your customers need after they initially do business with you eg. complimentary products/services, next-level support, monitoring or access, etc.
These are examples of metrics to consider as inputs to growth.
The idea here is you create your own metrics. Use the items from this list as a guide, but there may be other inputs that directly impact your growth.
And, focussing on these areas will help you build value into your business.
A valuable business is predictable with consistent growth.
Putting strategies around your metrics is where the gold lies. And makes them fun goals to pursue.
Hot tip: Get your team involved.
If you want to discuss the metrics that will drive growth for your business then let’s discuss it!
NOW is YOUR time,
Ariana
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