Half of all U.S. businesses don't make it past their first five years, notes Gallup. There are many reasons for this trend: founder burnout, competition, miscalculations about target markets — the list goes on. But don't let that statistic discourage you from planning for your small business's future. Here are five non-financial key performance indicators (KPIs) to track early on to increase your probability for small business success.
How many website visitors, leads and prospects are you transforming into customers? You should always take the time to monitor and understand your conversion rates. Low conversion rates are typically symptoms of bigger problems: mismatched messaging, lackluster product/market fit, or wrong target audience. Make sure to understand what's driving your conversion rates, and find ways to alleviate points of friction.
2. Speed and Quality of Execution
The day-to-day tasks involved in running your company are only part of the equation for small business success. You need to put your plan into action and take continual steps forward, too. Take time each week to create a list of the number of things you've accomplished, and rank each item on a scale of 1–10 to quantify their business importance. Calculate an average of these scores and monitor your progress over time. You'll develop a sense of the impact you're making and the speed of that impact.
How many customers stick around for the long haul? Small business owners and employees have limited hours in the day. Rather than chasing down new business, you should focus on optimizing the relationships you already have. High retention is a sign of an efficient business: when your customers find value in what you produce, they'll stay with you. If you notice widespread churn, or even signs of churn, you'll want to research the potential causes and take steps to increase those customers' satisfaction.
4. Service Development
Is your business offering the best possible products and services? In addition to selling and bringing on new customers, it's important to uphold your business's promises. To achieve this, track customer activity. Which products and services do people respond to the most? For example, Dan Norris, founder of WP Curve, looks at free trial conversions, sign ups and qualitative feedback to make sure his business delivers. He implemented this process early to identify strengths and optimize weaknesses before his business began to scale.
5. Customer Satisfaction
Happy customers are a business's most valuable asset. They'll not only return in the future, but they'll actively refer you to other prospects, too. To track customer satisfaction, consider administering occasional surveys. Monitor feedback to ensure that, on the whole, your service levels improve.
Facing uncertainty and risk, small business owners need anchors, and those anchors come from tracking KPIs. Every owner has systems for monitoring revenue and costs, but there's more to the story that can be found through non-financial metrics.
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