Measuring Growth as a Startup
What if your favorite soccer match came on the TV, and this time round, there are no goal posts? How do we separate the winner from the loser? What breathtaking goals do we celebrate? What are we doing behind our televisions at all?
Goals and achievements do not only give us something to cheer about, they tell us how far we have come and where we have to go next. From primary school pupils to developing nations, every individual and entity will grow in some way, and to better determine how to spur that growth in a positive direction, one must take the pains to measure this growth.
For start-ups as well, focusing on daily activities without taking stock can make your efforts as pointless as the players on a goalless pitch. It also makes decision making even more difficult.
Management thinker, Peter Drucker, once said, what cannot be measured, cannot be improved.
For any business to be able to tell how far it has grown, the paramount thing will be to determine its unique objectives. There is a reason why you started that venture, and you must try to cull simple, measurable goals out of this reason, which you will use to congratulate yourself or encourage improvement as you go along your way. For example, if you work in a media organisation you may have it as an objective that you will publish a story that will be discussed across the nation and cause your nation’s leadership to act. That cannot be transferred to a software engineer or an app developer.
Beyond your unique objectives however, there are some basic metrics that every business must consider. Here are a few:
Numbers don’t lie
For your business to survive it needs to make a profit. Otherwise your investors will see you as a liability. Document all your expenses at the end of the month and compare it to the mount of income you raked in over the same period. In some cases, you can separate the income which is owed you and the cash at hand to paint a clearer picture.
The Customer is king
You’re in business to get as many people to buy into your product as possible. Whether you sell coconuts in the markets or you give financial advice, people need to patronise your product in order for you to succeed. It is therefore important to note the number of customers you acquire at the end of the period being measured and determine what needs to be done to increase those numbers. It is also good to take feedback from these customers and see if they are being loyal to your brand. Studies show it costs five times less to keep an old customer than to acquire a new one. Experts also say a 5% improvement in customer retention yields between a 20 to 100% increase in profits. Regularly engage your customers through surveys and by talking to them so you can gauge how well you are doing form their perspective. They will keep your business afloat.
Employees also matter
Your employee (or co founder) is often your first customer and primary marketing officer. Satisfied employees give off their best and ensure your customers are served well. Because you must know how well your company is doing in the eyes of those working in it, employee engagement a key determinant for the success of the company. Companies with more engaged employees outperform their counterparts by 200%. This is a factor worth looking at.
What about business owners?
Often, no one truly understands the purpose for the business than its owners. They are the ones who came up with the idea in the first place, so for them to evaluate the performance of the company is key. Owners must not only consider the facts as they stand, but the desired performance and how they perceive the brand they have built.
Look at the bigger picture
Scanning the market also gives a fair idea of how you are doing. Maybe the goals you set are too modest or ambitious; the market dynamics will tell you this. In 2014 for instance, Ghana was at the height of a power crisis, industries were not getting electricity to run and revenues were dwindling as a result of austere measures in place across board. It became needful therefore for most companies to revise their figures in terms of targets and consider cost cutting measures themselves. The performance of competition also helps in this regard, where it becomes necessary to consider the innovations others have applied and their gains in order to inform your strategy going forward.
In conclusion, the importance of checking progress cannot be overstated. It requires careful planning to succeed at any venture, and that consciousness must be part of your company’s culture from the onset. Plato said after all, “an unexamined life is not worth living”.
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