8 absolute ways to assess your business performance

This article is a submission by D&V Philippines. D&V Philippines has years of experience in the accounting and finance industry. This third-party services company can generate the financial reports you need to make real-time financial decisions. 

Hitting your sales targets and profit goals is important not only for the survival of your business but also for its long-term prospects.

You might be achieving your objectives; however, you might be doing it in an ineffective way. You might be consuming valuable resources that will be difficult to regain just to hit the low end of your goals.

This is why you should identify ways to assess your business performance.

Doing so allows you to maximize your budget and improve revenues. Your teams need a consistent effort to reach your targets and your established key performance indicators (KPIs). 

8 ways to assess your business performance

How do you assess business performance? Here are eight ways to do so:

1. Establish objectives

Before you can measure your business performance, start with establishing objectives.

Goals provide you with concrete standards to pursue as you go from one project phase to another. Without clear objectives, you’ll spend resources inefficiently.

Identify specific, actionable, and timebound goals so that you can measure performance based on these. If you fail to hit your targets, then it’s obvious that your company is performing poorly.

You just can’t come up with a random objective. Base your goals with insights you gained from information about your competitors and your target audience.

A data-driven approach reduces the risks you might encounter and provides you with creative solutions. 

2. Create and implement performance metrics

It’s impossible to measure the success of a campaign, project, or business without performance indicators. Establish metrics to determine if a project or campaign is worth the resources you’re pouring into it. 

The performance indicators you create should match the objectives you created.

For example, you want to convert 3% of website visitors. This number is around the average for all sorts of industries. The metrics you establish should revolve around your target conversion rate.

Data such as users, sessions, pageviews, and time spent on each page provide you with insights about the behavior of your website’s visitors.

These insights enable you to create a campaign and optimize pages that could lead a potential customer further down the sales funnel. 

3. Review financial statements

You’ll know if your business performance is profitable.

Review your financial statements and reports to measure the profitability of your business. Compare the financial ratios of your company with those of your competitors and the industry average.

You might need to adjust your sales and marketing campaigns or find ways to make your operations more cost-effective. Reducing costs without sacrificing the quality of your products is a strategy you can implement.

Review your budget and determine which aspects of operations are redundant or inefficient. Removing these and/or redirecting resources to more efficient teams can cut costs and boost profits.

Keep your financial statements and data accurate with regular updates. You’ll need updated and error-free information to properly assess your business’s financial situation.  

4. Assess customer satisfaction

Businesses that don’t address a problem, need or want won’t be successful.

Satisfied customers are one of the pillars of successful companies. Learn more about and understand the needs of your target market.

Read reviews and comments posted on your social media pages and website. These provide you with insights into areas for improvement. It also gauges the engagement and interest of your audience.

You might need to add new features, include complementary products or services, or give a discount to provide value in the eyes of your customers.

Publish relevant content that your target audience finds useful and informative. This boosts your industry authority and improves your company’s brand image. 

5. Monitor new customers

New customers are indicators that your marketing campaigns are effective. It shows that the content you publish, call-to-action, website design, and others can expand your market reach.

If you still have the same customers for several months, you might have to improve and change your strategy.

Monitor the new customers that land on your website’s pages. The page they landed on and the time they spent on it provide you with insights about what they want. This allows you to identify the stage they’re in along the sales funnel.

If they directly went to a product page or went to it after browsing your website, a visitor might already be ready to purchase. These insights enable you to customize a call-to-action or content to convert a visitor.  

6. Gauge employee satisfaction

Your employees are vital to the success and growth of your business. Their engagement, motivation, and productivity can either make or break your company.

A high turnover rate means that your employees are unsatisfied with their workload, compensation, hours, tasks, promotion policies, and others.

They might just quit their job or quiet quit, both of which result in lower productivity and efficiency levels and create a toxic work environment that has a negative effect on everyone in your organization.

These increase your costs because you have to promote openings, interview, onboard, and train a new employee.  

Reach out to your employees and get their feedback to gauge their satisfaction levels. Find ways to keep them such as:

• Improving their compensation package
• Establishing clear policies for promotions and raises
• Creating growth opportunities (e.g., training seminars and certifications)

Consider outsourcing some of their tasks to ease their workload, eliminate redundancies, and reduce costs. 

7. Size up the competition

Analyze the strategies, pricing, campaigns, products, and other value-based offers that your competitors implement.

It allows you to customize your own strategy and identify ways to do better than them. This approach also enables you to determine your brand’s own strengths and weaknesses.

You can focus on your company’s strengths and find ways to reduce the negative effects of your weaknesses. If their financial data is available, you can compare their financial ratios with yours to determine their and your company’s profitability and liquidity.

Doing so enables you to improve your own resource management practices. 

8. Make a budget

A budget allows you to monitor your expenses and revenue.

Compare previous budgets to identify how you spent your resources. This allows you to identify if you used your cash effectively for campaigns, operation expenditures, product development, and others that led to profits.

You can also compare monthly revenue and expenses based on the budgets you created throughout the year. 

A proper assessment of your business performance using these key indicators enables you to decide whether to change your strategies or keep using them. It also allows you to determine your company’s financial position.