
How Do You Measure Success?
by Alisa Kirk
It’s common for businesses to do strategic planning in the Fall and set goals for the common year. By April, one of two things usually happens: either the plans and goals are still in place and perhaps even tweaked as circumstances dictate, or the plans and goals are in a drawer somewhere because life happened and everyone got busy putting out fires. Which of these things is true for your business?
The hardest part of a plan is implementing it, and even when you try to implement the plan, it’s hard to show incremental progress. Every plan should come with metrics that show the progress and success of each strategy. How do you set these metrics?
The first step is having a data collection system in place. You’ll need data on financial sources, marketing efforts, customer service, and internal processes (like production and time spent doing a job). If you consider that each strategy in a plan needs metrics attached, establishing a system to collect for these metrics is the logical next step.
For financial sources, who collects your financial data? Who pays your bills, balances your checkbook, creates your invoices? Make sure that all of the financial data is correctly kept in a system such as QuickBooks. If someone offsite, like your CPA, maintains the system, ask for financial reports that give you the data you need. Are you measuring sales, profit margins, labor costs, or collections? Ask for timely reports that help you monitor progress in these areas. If you don’t know how to read financial statements, ask your CPA or consultant to teach you.
Other things like marketing efforts and internal processes will require that you set up the collection system. If you are going to advertise someone, train your staff to ask each caller and contact how they heard about you. Write it down. Compile the answers. For internal processes, you may need to ask technicians and others to keep track of hours spent doing a task or how many items are produced in a time period.
The important thing about establishing these systems is to make sure that what you are measuring will be an indication of the progress and success of a strategy in your action plan. If you need help with matching these metrics to the strategies, there are a lot of sources out there, like the SBDC, who would be glad to help.