The Importance of Business Measurements

Ever heard of the old saying, "What gets measured, gets done?" The same works for business; particularly a start-up business. You can never ascertain progress properly unless you measure it.

I work with start-up business owners on a weekly basis and one thing that I advise is that they are diligent enough to measure business planning strategies such as: new sales strategy, new elevator pitch, new pricing structure, new sales methods for you or employees, new uniform, new way of answering the phone, new office environment, etc.

Otherwise, how else do you know whether your method is working?

Did you start a new sales campaign? How did that work out? How many new businesses did you bring in? What kind of client did you acquire? Did people come in easier with less probing? Did they refer their friends? Did they use credit cards, cash or checks mostly? Were these online or face-to-face customers? Did they respond better to mailings, email sales notifications, or phone calls?

The answers to these questions should help you figure out whether this was the best time of year for your sales, whether your pricing was appealing to clients, whether or not you need to do more online sales, or how you should notify clients in the future, etc.

Here's another example of measurements that lead to a change in business model or service offerings. Let's say you are a retail entrepreneur, you open a clothing store designed for toddlers. You decide that once clients are checking out their items, you will implement a conversational one-liner of "So, where are you headed today?" What seemed to you at the time to be "small talk" has now turned informational.

From asking the question, you now realize that mothers are entering your stores alongside grandmothers and aunts and the majority response to your question indicates that they come to your store on days that they free up to shop. They also tell you that they wish you had clothes that they could buy.

So you decide to take a survey of your target client and you ask what clothing stores they patronize. Then you find out what kinds of women clothing these stores carry and what price ranges they offer. Based on these results, you now decide to have a Mom & Me discount shopping day and your store now goes from selling only toddler's outfits to include women outfits. You also have your branding messaging reflect this change.

With this example, you implemented a new customer service tactic (the phrase) and you measured it. In other words, you were not only concerned with asking the question but you were interested in the answer. You then measured the percentage of people who gave you similar answers. Then you used those answers to modify your service offerings.

The surveying of clients, potential clients and research of your target audience does not stop and end at the initial phase of business. It is essential to continue as your business develops. Try new things and measure their outcomes in business. Sometimes you may be wrong, but most times, you may be "on the money."

Just remember that you cannot bake a good cake without the proper measurements. The same goes for business--particularly in your first and second years. Stick to your concept, but try different formulas and see what works.

About the Author: Cheryl Isaac is the writer of this blog and a Start-up Business Consultant & Owner of Isaac Business Services, an agency that offers start-up concierge & business planning services for small businesses.