Measure your successes, they said. It will be fun, they said.
But if you’re like most business owners or administrators, when you start the process you can find yourself frustrated, overwhelmed and buried in spreadsheets and the binders of death.
It’s not uncommon to experience “information overload” when trying to measure business success. The best place to start is with a focused set of data that is truly useful to you in making decisions that will help your organization.
Of course metrics are important in determining lasting success, but how do you decide what numbers you should be looking at and what you should be measuring them by?
What are your key performance indicators, or KPIs for short?
Metrics should measure progress toward achieving your organization’s vision, mission and core values. Don’t simply measure what is easy to see. Metrics should be quantifiable – it’s impossible to measure gut feelings.
Your measurement efforts should also represent 4 essential factors plus 1 overall success measurement:
- Financial viability or profitability
- Customer satisfaction.
- Employee satisfaction..
- Community contributions or philanthropies
- Key operational results.
What makes these pieces of data ‘key?’
Let’s take a closer look…
- Financial Viability is important for organizational survival and growth. This is critical but should not be the sole focus of measurement. The result is an organization driven by financials without considering the “people” outcomes that are essential to produce long term success.
- Customer Satisfaction is important because without customer feedback it’s difficult to understand the impact your interactions are having on your bottom line. Remember – it’s not our goal to have 100% satisfaction on our surveys – we want the good, bad and ugly so we know how to improve. Reach out to those families you’re unsure of or even the ones you KNOW might have an earful to give you. You’ll grow there more than you will just asking for positive feedback, guaranteed.
- Employee Satisfaction is important because over the long term it is impossible to have an organization with unhappy employees that has happy customers. Quite simply, it takes happy employees to make happy customers.
- Community Contributions are important because every organization needs more than a financial motive to attract/retain the best talent and to sustain itself for the future.
How do you figure out what your financial picture looks like?
Here are 7 metrics to consider:
Every business or organization’s financials draw from these metrics (or ones similarly named) to create your financial picture. The first 4 metrics are tangible measurements which makes them some of the easier metrics to capture.
1.Your break-even point
This is the number you need to generate within a given period (generally a month or quarter) to cover your costs and sustain yourself even if it doesn’t generate a profit during slower times.
2.Enrollment conversion-prospects to registered
It’s important to keep track of where your lead sources and which ones converted for you. Did you send out a mailer, emails or purchase ads? Do you have open house events or collect potential new students from birthday party lists? Knowing where your potential new students come from (and where the ones who converted came from) is very important in helping you to make decisions about allocations of marketing dollars. Knowing how many potential students become your students help you track your growth.
Sales for your organization can come from several areas. You have tuition, which is – no doubt – your largest revenue area, events such as birthday parties and mom’s night out and store sales (if you have a store for selling such items as snacks, water and branded items). Learn which areas make the most money, and those that are the weakest. Look at such metrics as seasonal trends for each and the total. All of this information provides valuable insight for other actions and decisions.
4.Net income ratio/profit
Your profit – the money left over after operating expenses are subtracted from revenue – is a pretty important one. A business just starting out, or one experiencing a bit of a slowdown, may have a bottom line in the red at some points, but you should aim to always be growing your profit. Your metrics put the details at your fingertips that will tell you what is causing the money loss so you can make operational adjustments to fix it.
There are also some less tangible – but still important – ways of measuring the business success that at take a little more effort to obtain or identify:
5.Customer growth (new, repeat and referrals)
A growing customer (or student) base is a sure sign that your business is reaching your target audience’s needs. Businesses thrive because customers count on them as a go-to, but also because happy customers are loyal and refer others. Consider offering a referral incentive, which will pay off by helping attract new customers and help you gauge your current customers’ satisfaction. Keep all your customer information in one place and be sure to have a way to track where they come from.
Your staff is a critical part of your organization – in fact they are the face that everyone sees as your business. It’s important that you help to ensure that they have a positive work environment that lets them do their jobs with pride and efficiency. If your employees feel appreciated, they are more likely to go the extra mile for your customers, which will increase customer satisfaction and lead to referrals and new customers.
It’s easy to get swept up in prospects, parents, students and staff but don’t forget about your own satisfaction with the direction that your organization is going in. Take the time to monitor your satisfaction with your business and make the changes necessary to achieve your goals.
How do you determine what your overall success measurements should be? Consider these points:
- What do your mission, vision and core values tell you is important to your organization? Make these items your overall success measurements.
- Limit your overall success measurements to 10 or less so that your measures are focused rather than overwhelming in detail.
- Set an ultimate goal (usually 3-5 years) for your strategic planning and intermediate goals for the years in between.
We know you’re serious about your success and so are we. Click here for our free download of the month to remind yourself of your goals as often as you need.
What gets measured gets done.
- Create overall success measurements that track outcomes instrumental to sustained organizational high performance, not just what is easy to measure.
- Make sure that your measurements support your mission, vision and core values.
- Stay focused by limiting measurements to those most critical to supporting mission, vision and
Ready to take your goals to the next level? Connect with a Jackrabbit specialist today and see how we can help.