Initially, you may not have any idea about how to go about measuring your business’ performance. Additionally, it may prove to be a tedious and overwhelming process in the absence of well established guidelines. However, you would do well to remember that in the beginning stages of your business, it is not necessary to measure performance accurately or perfectly.
Gradually and with time, as you get the hang of it, you will discover new and better measuring strategies that will enable you to gauge the performance of your business effectively and efficiently. In the primary stages, you can use the following five basic yet important business performance measures.
Customer satisfaction is the most important criteria that can determine the performance of your business. Every business wants to earn profits by satisfying and fulfilling the needs and requirements of their clients and customers. However, in the end, if your customers are not happy with your product or services, then you have not only wasted your time and effort, but also other valuable resources. That is why it is very important to measure the satisfaction levels of your customers.
This can be done in various ways, by asking them or through surveys forms or questionnaires. This will enable you to compile the necessary data pertaining to important aspects of your business, and to make changes if necessary.
Shortcomings or Faults in Products and Services
This is directly related to the quality and performance of your business. When defects in products are reported, it directly interprets not only the satisfaction level of your customers, but also translates to you their expectations regarding your products and services.
The measure of customer satisfaction is complementary to the defects in your product and services. This information will also help to give you a clear idea about the different reasons for the defects, faults and other shortcomings in the business.
Time for Entire Cycle
The time taken to complete the full cycle successfully, to produce a product or render a service to your customers is of utmost importance and has an immediate relationship to the level of customer satisfaction. Therefore, the cycle time should be measured in order to measure the performance of your business appropriately. Using cycle time as a basic business performance measure does not merely entail production of the product or fulfilling the service within the committed time frame, but also ensuring efficient use of time, efforts and other important resources.
This includes eliminating any steps that are unnecessary or a waste. Additionally, it emphasizes the need to set fixed working standards. Timely delivery is a fine example of this, and is directly again linked to customer satisfaction.
Productivity as a Performance Measure
The success of the productivity of your business in terms of elimination of waste, rework, work hours, rate, quantity, cost, and other important factors like resources and labor are all included in this strategy.
Encouraging Innovation and Improvements
If you expect your business to be successful, then the structure of your business culture should encourage and promote innovative ideas and improvement. This includes the ideas of all of your employees, no matter what their position is. Make sure that your employees know that no idea is too outrageous for consideration – because then they be more forthcoming with their ideas for improvement. And who knows your customers better than your employees – the ones dealing with customers every day?
In order to ensure your business’ success, you have to know where it stands. Using the basic performance measures above, you will ensure that your business is as successful as it can be.