All entrepreneurs want to grow and expand their businesses. I’m sure many of you have followed different tactics in the hope of growing your companies. Nevertheless, there’s a question you should consider – how do you measure business growth?
It’s perfectly fine to copy the advice you read online, but how do you know if it’s had the desired effect? Well, these are the key factors that tell you if your business is growing or not.
Image from pixabay (CC0 License)
Track Your Customer Base
Has your business grown if you haven’t taken on any new customers? Has it expanded if your loyal customer base stays the same – or decreases? In my eyes, it hasn’t. A key indicator of business growth is an increase in your customer base. This shows that you’re attracting more and more people to your company than you were before.
With that in mind, focus your efforts on reeling in new customers. Have a look online for websites that post requests for business quotes. In effect, this gives you lots of people to contact and drive towards your business. Traditional marketing methods will also help you out, and you should measure your customer base at regular intervals to see if it keeps expanding.
Measure Your Revenue
Similarly, an increase in revenue can indicate growth. More customers will mean that you’re making more sales. In turn, this leads to more money in the bank. A business won’t grow if it doesn’t start making more money – that’s a fact. You need an increase in revenue to invest more money back into your company.
This is how growth works – it comes as a result of success. Failure to make more sales and generate more money means you will struggle to grow your business.
Image from pixabay (CC0 License)
Look At Your Rivals
Lastly, you can measure your growth by looking at your closest competitors. Let’s say you had a core group of rivals when you first started your small business. Back then, you were right at the bottom of the pile. They had more customers, they were all making more sales, and it was a struggle. But, take a look at how things stand after you’ve attempted to grow your business.
Are you in a better position than you were before? This doesn’t mean you’re at the top of the pile, but it could mean you’re no longer right at the bottom. If you’re closing the gap on your rivals, then it shows your business is growing. Things get even better if you’ve overtaken them, and they’re the ones playing catchup.
Growth should be encouraged, but you must be aware of how well your business is growing. As a consequence, I strongly suggest you make goals and set targets. These can relate to all three of the things mentioned above. Set goals for customer growth, revenue targets, and your rivals. Now, you can track your progress in relation to these goals. It’s a smart way of seeing if you’re moving in the right direction and growing as you should be.
