Starting a business is exciting but growing it can be a challenging endeavor. Measuring the growth of your business is crucial in determining whether your efforts are paying off or not. Without measuring your business’s growth, it is difficult to identify what is working and what is not.
There are many ways to measure business growth, but before you start, it is essential to determine what growth means to you. Growth could mean an increase in revenue, more customers, new product launches or even expanding to new markets. Once you have a clear understanding of what growth means to your business, you can use the following methods to measure it.
Revenue growth
One of the most common ways to measure business growth is by tracking revenue growth. This can be done by comparing your current revenue to your revenue from previous periods. If your revenue has increased, then your business is growing. You can also calculate your revenue growth rate by dividing your current revenue by your previous revenue and then multiplying the result by 100.
Customer growth
Another way to measure business growth is by tracking customer growth. This can be done by analyzing the number of customers you have gained or lost over a specific period. If your customer base has increased, then your business is growing. You can also calculate your customer growth rate by dividing your current customer count by your previous customer count and then multiplying the result by 100.
Employee growth
The number of employees in your business can also be an indicator of growth. If you have hired new employees, it means your business is growing. However, if you have been forced to let go of employees, it could mean your business is not doing so well. You can also calculate your employee growth rate by dividing your current employee count by your previous employee count and then multiplying the result by 100.
Market share
Measuring your market share is another way to determine your business’s growth. If your market share has increased, it means your business is growing. You can calculate your market share by dividing your sales by the total sales in your industry and then multiplying the result by 100.
Net Promoter Score (NPS)
NPS is a customer satisfaction metric that measures how likely your customers are to recommend your business to others. If your NPS score has increased, it means your business is doing well. You can calculate your NPS by asking your customers how likely they are to recommend your business on a scale of 0 to 10.
Sustainable business
It is important to note growth does not always mean success. Sometimes, businesses can grow too quickly, which can lead to issues such as cash flow problems and overworking employees. Therefore, it is essential to monitor your growth and make sure it is sustainable. Of course, a key part of keeping your business sustainable is making sure your business finances are managed properly. Collaborating with a financial professional can help you craft a financial plan and budget that will keep your business finances on the right track, ensuring the business maintains sustainability.