Many managers and owners spend a huge part of their lives involved in their business. But at the end of the day, how do you measure success? There is no one-size-fits-all answer, but here are some metrics to think about.
The primary goal for a business is to make money. A business will go under if it’s unprofitable for long enough.
However, increasing short-term profits at the expense of the long term might not be smart. For example, cutting necessary capital expenditures like new equipment might increase profit. Or loading up on debt might seem attractive. In the long run, both decisions could have a negative impact.
A similar number you can look at is the balance sheet, which is assets minus liabilities. By focusing on increasing your company’s worth, you might avoid debt. Debt has tanked many businesses in the past.
Do you have customers from the very beginning? Do customers tend to stick around, or is there high turnover? Do you have high customer satisfaction ratings? Do your customers recommend you to their friends? With the internet, apps, and customer loyalty programs, this is easy to track.
Some managers and owners might judge that they are successful if their customers are happy. After all, without customers, a company would be nothing.
Are your employees happy? Do they feel secure in their jobs, or are they worried about getting laid off? Do they feel they are growing in their careers?
Some companies consider their employees to be part of a big family. They wake up every morning trying to make you money; you should repay the favor.
How happy are you with the current path of the company? Are you working too hard, or do you wish you were more involved? Do you like your management?
As the owner, the business ultimately solves your aim. A company with a happy owner is successful.
How do you spend your days?
Living our lives day-to-day is often all we have. It would help if you tried to spend it on activities you enjoy. Should you hire a CEO that will double profitability but you can’t stand? Are profits good but you’re traveling a lot and missing holidays? These are calculations that owners have to make.
Measuring the success of a business isn’t easy. There are multiple metrics to look at.