One of the key activities in building a successful business is measuring how well your efforts are working. There’s the obvious measurement of whether profits
are increasing but you don’t earn profit in a vacuum. Your profits are directly related to a myriad of other activities you do and many of these can and should be measured. Most solopreneurs I talk to don’t like numbers, so it’s important to keep any measurement efforts simple, quick and informative. Almost nobody gets things right in their business right out of the gate, so the difference between success and failure is to be always measuring and adjusting to what you do.
The first step to measuring is to be strategic about what you decide to do. It’s not enough to say “I’m going to start Tweeting” or “I want to blog more.” There has to be an objective to your activities and preferably it should be one that can be measured in some way. Ultimately, of course, the objective in a for-profit business is to serve more people and make more profits but it’s likely that many of your activities will have results that are intermediate steps to making profit. For example, you may want to increase the number of people you meet through networking, but adding numbers alone will not result in more business. A more strategic way to think about this would be “I want to meet more people through networking so I can have 10 meetings per month with people who can refer business to me.” Your progress on this goal can be measured – how many people did you meet this month, and how many potential referral partners did you meet up with? It’s also an intermediate step to profit – empowering more people with what they need to know to refer to you can result in more referrals which can result in more business. Once you begin measuring these 2 things – people met and meetings set, you can see how well your efforts are working. Later, when you have some data over time you can see how much business you got from these referrals and have a sense of the dollar value of your networking efforts.
Conversely, if you didn’t measure this but only went to event after event and added to that ever-growing stash of business cards, you’d have no strategic goal, no way to measure and no way to know if the time you invested was paying off. This is why it’s so important to measure your results – continuing to invest time and energy into things that are not working will hurt your business. You do have to do this for yourself – you can’t just do what other businesses do because every business is different. As far as how to track the figures, I use a simple spreadsheet which I fill out every Friday. If a measurement has improved, the number is green so even with a quick glance I can see how I’m doing.
What do you need to start measuring in your business? Leave a comment and tell me about your plan.