How do you measure the success of your business? More
importantly, how will a potential buyer determine if your business is
successful enough to buy? In this article, we want to talk about Benchmarking
against your competition and Measuring
success.
Your customers are the ultimate source of success in your
business. Without them you wouldn’t be in business. A successful business has
to have an understanding of its customer base and how each customer supports
the business. Without that understanding, strategic decisions that will help
grow your business cannot be made.
Returning and repeat customers typically are less expensive
and require fewer resources to obtain future revenues than do new customers.
Similarly, potential buyers of your company will attribute a higher value to a
company that has higher customer retention than one with high turnover.
Sales to new customers are important, but many companies
make more revenue from their current customer base. How about your company?
Could you provide a new product or service that is needed by existing
customers?
Whether the goal is to retain a small number of returning
customers or build a robust customer base, your job as the owner is the same.
You must set unique goals and objectives for the results of sales activities;
communicate those goals; Make resources available to make sure those goals are
achieved; and Hold people accountable when the goals have not been achieved.
Do the sales goals you have set contribute to building value
in your company?
How does your company compare to your competition? Every
industry has unique performance objectives and expectations. If your business
outperforms the industry average, it is much more likely you’ll be able to sell
it for a premium. In order to be able to
tell how you compare to the industry average, you must use industry metrics
that give you a set of benchmarks to compare your company’s performance with
similar company’s products, services, and customers.
Driving your company to the highest possible value requires
intense focus on the critical elements of success. You must have specific
action steps and benchmarks to achieve your goals and grow your business value.
