When looking to grow your business, tracking performance is one of the most important things you can do as a business owner. By keeping records of your monthly, quarterly and annual performance you can easily compare how your business is doing now compared to the previous years.
Why Track Business Performance?
Many owners do not prioritise the tracking of their business performance. They might have a rough idea, but lots of business owners do not utilise performance-related data in the most effective ways.
Without keeping track of how a business is doing month-by-month, it’s impossible to have a clear target or expectation for the level of business they should be doing. How can you know what to aim for if you have no clue what your level of performance was in the last month, or the same month the year before? This leaves businesses like ships without sails, stranded at sea without any focus or direction.
If you know how your business has performed in previous Septembers, for instance, then you can set a realistic goal for how you should expect to perform for September this coming year. Of course, there may be differences, but it gives you some idea of what you should expect. It gives you a point of reference, so you can hoist your sail and set a course!
As well as being useful for goal-setting, it can help with budgeting if you know what your turnover and expenses are likely to be every month. This makes managing the business far easier and will help you to grow it in a sustainable way in future.
How to Use Your Performance Data
One of the first things you should do is look back at your business’ performance in previous years. You will find lots of pearls of wisdom here!
You might wonder what percentage of total business was contributed in each month. Once you know this for previous years, you can apply it to the current year’s figures. So, if your business turned over £500k last year, and 10% of this was contributed in September, then to grow your business to £600k you should aim for £60k in September!
No two years are likely to be exactly the same, but it’s a good idea to have a rough idea of what each month will look like. The more data you track, the more you will be able to make accurate and helpful forecasts for the coming months and years. When it comes to planning and strategy days having a clear understanding of the underlying figures for your business’s performance can be so useful for sustainably growing your business. So be sure to track the figures that will allow you to do this best!
