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Reviewing Your Business Performance

Aug 17, 2007
It's been an entire year with the company. When you quit your job, you probably thought youd escaped performance reviews for good, but Ive got some bad news for you. Why not look back to see what you did wrong and what you did right.

1. Did You Make A Profit Or A Loss?

The first, and most important, question to answer is this: what does your balance sheet look like? You need to honestly add up all the numbers - dont be tempted to add on money that you think youre a few days from getting, or take away bad purchases that proved useful in your personal life, for example. Hopefully you kept electronic records, so this shouldnt be too much trouble.

Once you know how you did, you need to look at how to do better. If you made a loss (as almost everyone does in their first year), what can you do about it? Where did the money go? If you made a profit then, well, congratulations! But you still need to think about how much of your profit to re-invest in the business, and how you can increase your profits next year. Remember that money makes money: once youre making a profit, wise investment can make it grow exponentially.

2. How Many Customers Did You Get?

Now, take a look at your customer database. Whats the total number of people who dealt with you this year? How many is that per day, and how much did each one spend? Once you have this information, you can work out how much customers were paying you overall weekly, daily or even hourly. If it seems like a lot more than you saw, you need to ask yourself if you spent too much of their money on expenses. If it seems like hardly anything, then youre in trouble. Sorry to be blunt, but either you need to consider raising your prices, or youre just not doing enough marketing or working hard enough.

3. How Many Came Back?

Of course, a more important metric than the total number of customers you had last year is how many of them came back more than once. Work out what percentage of your business that was repeat business - note that this means you count someone twice if they bought from you three times overall, three times if they bought from you four, and so on.

An easy way to do this is to simply take your number that says how many times a customer has dealt with you, subtract one from all of them, and then add it up. Once you know the raw amount of repeat business, you need to divide it by your total number of customers and then multiply by 100. This gives you a percentage. If your repeat business is lower than 20% or so of your total business, this is cause for concern. Are you doing enough to stay in touch with your existing customers?

4. What Did Customer Complaints Say?

Why not keep track of all customer complaints? You need to take a good look over what you did right, what you did wrong and what you messed up. I know you dealt with things as they came up, but looking back over everything can help you to see the big picture. Its all too easy to miss quite simple patterns when youre in the thick of it day-to-day, and looking at the complaints can reveal a trend that you werent expecting.

5. What Have You Learned?

Write down what you learn in a log. Your accumulated knowledge is valuable: you have paid for it in cash and in sweat, so make sure you dont forget it. What kind of positive things can you come up with the improve?
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