Keys to High Growth Business: Measuring the Right Things

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Just because you’re busy doesn’t mean you’re growing your business. If you’re not measuring your growth, you really don’t know if you’re growing or not. And one of the keys to high growth business is measuring the right things. But what should you measure, and how should you do it?

What to Measure: A lot of businesses waste time and effort measuring the wrong things. This can be a bit tricky because there are some important things a company can measure that don’t tell them the whole story. For example, Your company could have great production statistics. Does that mean your company is healthy and growing? Not if people aren’t buying what you’re selling. Or you could simply look at sales and see that your sales are up 15% over last year. That’s great news, right? It could be unless it’s costing you too much to generate those sales and your profitability is dropping through the floor.

I saw a perfect example of this just a couple of weeks ago when I read this headline in the local paper: “ACME Industries boosts income, losses widen” (Yes, I changed the name of the company to protect their identity, but it’s an actual headline).

In short, it’s important to measure the things in your business that give you a true picture of how your business is doing. Small, incomplete snapshots of parts of your business can actually give you a false sense of security. If your company isn’t really healthy, you’re not going to grow. Selling more and making less isn’t the path to growth.

How to Measure: Chances are you’d never use a tape measure to determine how much cash your business has on hand. You wouldn’t use a micrometer to track sales. Still, a lot of businesses are unclear about how to measure the most essential parts of their business. Even companies that understand what they should measure are often unclear about how to do it in a way that gives them an accurate picture of where they are financially—and what corrective steps they need to take. Here’s a post that gives you a brief look at a quick tool that shows you the kind of specific questions you should be asking on a regular basis.

I’ve helped a lot of growing companies identify the key “measurables” of their operations: The data that really tells them whether they are making progress toward their goals or not. That includes walking them through the appropriate tools and timing for measuring. I’ll confess: It’s not rocket science. But if you’re not doing it properly—and regularly—it can kill any hope of scaling up your business for big growth.

If you aren’t sure what you should be measuring, or what tools to use to get accurate information—or if you simply haven’t been able to do it on your own—give me a call. I can help you establish what it is you need to be doing. I can set you up with the right tools to do it properly. And I can even help hold your toes to the fire to make sure it happens.

Categorised in: Business Growth, Key Ideas to Think On, Strategy

This post was written by Chuck Kocher