+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
The deal didn’t close. The numbers were down. The last few months have been really slow. What does it mean?
Most small business owners use financial results to gauge their performance, and when financial results are disappointing, they get down on themselves. They look at their pile of bills, and they subconsciously think: "I can’t do this."
Self-doubt and worry destroy productivity. So you need to keep focused and action-oriented even when nothing seems to be going your way. You need performance criteria that include financial results (good and bad) and also offer you longer-term, bigger-picture perspective on your business.
I suggest defining performance metrics for yourself that meet three characteristics. 1. They are explicit and meaningful. 2. Other people know them, too. 3. There are no more than three or four criteria. Below are some ideas for how you can define your performance beyond your financial results.
1. Use a "pipeline" metric in addition to revenue numbers. In other words, a bad month or even a bad quarter revenue-wise could be a temporary dip. You keep perspective on this only if you know how healthy your pipeline is and have an organized way to see how many new leads are coming in regularly.
2. Measure customer/client satisfaction routinely. You want to remind yourself constantly why you do what you do and use this to measure your overall performance. It really doesn’t matter if you use an evaluation form or ask for testimonials; the point is to measure your impact on an ongoing basis.
3. Evaluate one core skill. Since you don’t have someone looking over your shoulder and you do way too many different things to have a "job"—the easiest thing to do is to measure a core skill you want to develop. For example, if you are working on your sales skills, come up with a way to know you’re improving at selling. Is it more calls? More meetings? Higher conversion?
Above are just some suggestions and food for thought. The important thing is that you decide for yourself what are some important nonfinancial measures to keep your eye on the horizon and your hand steady on the wheel, no matter how rocky the road becomes.
Michael H. Felberbaum
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.