6 Ways to Measure Growth for Small Businesses
The owner of a small business is naturally invested in their company, doing everything they can to ensure continued success. Measuring business growth comes in a variety of ways; although most people associate this with sales or operating “in the black”, that’s not the only way to see if a company is multiplying.
Here’s a few other ways that are popular.
Understand the Demand
Evaluate the company and see if there’s increased growth in products or service being offered. If customers constantly order or need an item or service multiple times a day, review how often it’s being purchased. Noticing a steady increase over several days means the business is growing.
See How Often Hiring Takes Place
If the company has workers but it feels like there aren’t enough to do the job, this can be a sign of growth. Consider how operations were when the business first started out. If employees could handle the demands with no issues but are suddenly finding it difficult, it’s more than a sign. Needing to hire employees translates into the business expanding.
Review Profits and Losses for Obvious Business Growth
Turning to the P&L charts is a common practice all business owners engage in to see how everything is going. After calculating what’s left when losses are subtracted from the profits, it’s easy to determine if there’s continued growth. Comparing current P&L’s to previous months is helpful when looking for a pattern and noticing any changes, large or small.
Spot Changes in Sales
Sales is another common (and easy) way to see how a company is doing. While the overall number of sales can show growth, it’s important to look at what items or services are selling. Catering business needs around these can help make the most of current resources present.
Look at Market Share
Looking at the current market can show if there’s room for growth and how many people need the services being offered. One of the best ways is to see if there are similar competitors, and how their business is doing. Contrary to what most folks thinks, a competitive market is good for growth.
Notice Change in Overall Revenue
Annual revenue is one final way of examining business growth. Although many company owners don’t want to wait a full year to get an idea, a consistent year’s worth of financials can show if there’s steady growth, or if the business is falling backward.
Looking at how a business grows is important for continued success. Knowing which ways to measure company success in can help business owners understand what direction their customer needs are going in, and give them a better idea of how to accommodate as they grow.