The utmost goal of every business is to succeed, and success requires more than just luck. It is the ability to sense opportunities, seize them and adapt to any changes in the business ecosystem.
As an entrepreneur, you should be aware of the policies, processes, and procedures that guide the market and figure out what affects your business’s success.
Many businesses close down because they didn’t pay attention to these changes and the key drivers of the business.
In this post, you’ll learn the 6 simple ways to evaluate your business performance.
1. Look Through Your Financials
First off, it is quite unfortunate that many small businesses in Nigeria do not have financial statements, let alone have one to look at.
There are three most important financial statements you need as a business owner; income statement, balance sheet, and statement of cash flows. These statements will help you know how much profit you are making or how much loss you are incurring. They will also provide you with an idea of the best business options.
2. Pay Attention to Customer Satisfaction
Like they say, first impressions matter. In business, you must give your customers a long-lasting impression so they keep coming back to you. Ask your customer if he or she feels about your service or product. You can do this by getting their reviews through surveys. Their reviews can be posted on your social media platforms.
Customer satisfaction is an important determinant for long-term success. Knowing how much satisfaction your customer gets from your product or service is important for your business’s success.
Also, you need to keep track of your existing customers. That way, you know those who are still yours. You can do this by calling them or sending an email to them.
3. Check If Your Customers Are Loyal To Your Brand
Your customers could become your ambassadors if they like your services or products.
A friend of mine, Sam, once asked me if I knew any good tailor around the neighborhood. I said yes, not because the tailor had sewn me any dress but I had seen the result of his work on another friend, Shadrach.
I got the tailor’s number from Shadrach, sent it to Sam and he(Sam) thanked me for referring him to the tailor.
Do you see? He didn’t need to sew me a dress before I gave him a new customer. His service appealed to me, so I sold it and increased his number.
Remember, the progress of your business depends on numbers. This is why banks are very much more interested in the number of customers they have than in the amount one customer has in his or her bank account.
4. Understand Your Competitors
Competition is very healthy for business. Otherwise, many business owners would be very indifferent about the quality of their services or products.
Imagine if we had only Samsung phones or only First Bank or only MTN. These companies would not have been working to churn out new ideas to outcompete their competitors in the market.
As a business owner, you must work on your competitors’ weaknesses and convert them to your strengths. That way, you do not just retain your customers, you win theirs too.
Knowing how many customers you have been able to win over is important in evaluating your performance.
4. Meet Your Business Targets
Every good entrepreneur knows that having targets for every business year is important to evaluate performance rate. Any business owner that fails to have a target will end up moving very slowly or not moving at all.
Your result may not meet up your targets. However, making targets helps you work harder.
5. Be Sure That Your Employees Are Happy
There are many reasons for high staff turnovers. Promotion issues, bad leadership, and a toxic work environment are some of the reasons why employees leave a place. Carry out an employee survey every year or two to know what your employees feel about the work environment.
Your employees are your greatest assets, and your business productivity is dependent on their performance. Pay attention to their demands and watch your business change.
If you’re doing these and you’re able to stabilize your profit, you might need to innovate more products or scale the business. However, you don’t have the funds yet.
CashDrive loans for business owners and individuals could be all you need.