The 5 Metrics that really matter in your small business
Have you done the maths yet?
Have you looked at your income goals from the start of the year and worked out how close you were to hitting them? And what that even means in terms of profitability, sustainability, and whether this solopreneurship malarkey is even worth the hassle?
Before you go any further I want you to know this.
Despite what you might hear on the internet, income is not the be-all and end-all when it comes to assessing how well you have done in your small business this year. And if you are using that as a guide to whether your business is in a growth, decline or stagnating stage…you are doing yourself and your business a huge disservice.
As someone who has had some huge financial wins as a solopreneur the last few years, I am not saying that making money is not important…but in my view, there are 4 other metrics that are equally as important, and these should all be reviewed in relation to one another…because if your mission-led business is doing even some of this stuff right, you seriously are on track for having a fab year next year.
I set an income target at the beginning of each year. I do an exercise to work out how I plan to make that money, but I am not completely tied to it as a plan. Why? I mean where have you been the last 2 year? As entrepreneurs we have the ability to be adaptable and agile, and in fact my income leap in 2020 was directly related to my ability to give people what they needed at that point in time…rather than following a plan.
Not only do I set the income target at the start of the year, but I also set monthly goals, and I track my income daily too…I have an intimate relationship with my numbers so that I own them. I didn’t hit my income target this year, but I know why…and in not hitting it, I actually had the time and space to focus on some of the fundamental building blocks for my business that may have stunted my growth down the road.
Also, it is worth saying that income declarations, especially in the online world are often hyped up, or are at best not completely transparent. They may show you what someone’s turnover is, but you don’t know what the cost of sales are, and how much money they get to keep after things like staff costs, system costs, advertising spend, or affiliate fees…you might not want to go after a business model as an example of what you want when you see what is actually leftover at the end of a year.
Finally, I would also think about where and how you spent your hard earned money this year. For the first time ever I actually considered how much money I have put back into the UK economy, the types of business owners I wanted to support to grow their business in terms of service providers, coaches and experts…being a good custodial of your money is just as important as how much you make in my view.
In 2020 I worked with more than 3000 clients. Many of those clients grew their businesses which helped their clients, communities, and families…so we really are talking about the ripple effect here. Do you have a way of tracking impact, either from a quantitative or qualitative perspective? Do you think about the number of people that consume and get value from your free content as well as your paying clients?
For 2022 I am also stepping this up a gear and making some commitments to support a global charity that I feel aligned with. This will include a big hands-on project involving my plus-size fitness business, but also an allocation of my business profits. I will then be able to report back on the wider global impact I have, connecting to the United Nations Global Goals initiative…personally, I am really committed to supporting goal numbers 1, 3 and 4 …addressing inequalities in terms of Poverty, Health and Well-being and Education.
For me impact is at it’s core the feel-good stuff, it is in the emails you receive from people in your audience sharing what a difference you have made, it’s the seeing your clients transform and go on to do great things without you, it is the stepping up and using your influence towards causes that are important to you.
Do you want to be an influencer or do you want to have influence? Are you interested in having large audiences for the sake of it (AKA vanity metrics) or is there a mission and strategy behind focusing on your audience growth and engagement?
I believe as solopreneurs building personal brands we have the opportunity not only to attract clients, but to attract collaborators and cheerleaders too, and when we do this effectively, finding our peeps, surrounding ourselves with folks who have similar views or values, we create influence and maybe even power. We then get to decide what we do with that.
The measurement of influence can be more difficult to track outside of audience numbers, and so can often be about perception and the quality and quantity of opportunities that come your way, whether that be in terms of collaborations, joint ventures, sponsorship deals, media opportunities…or maybe even just a sense that you have increasing significant in your field.
Influence can also be about the shifts that those closest to you have made in relation to you…I often look at my almost 9 year old and her growing interest in entrepreneurship, and wealth creation (yes chores for cash works a treat)
Do you know more this year than last? Has your experience, expertise or knowledge increased over the past 12 months? And more importantly has your ability to implement any learning in your business, to aid your growth and or ensured the quality of your products and services have improved?
As a business owner I am always testing, and piloting my products, services, marketing tactics and messaging…I collect and analyse data, and tweak my strategies accordingly. I am an avid learner too, so I employ experts to help me increase my expertise and understanding of relevant areas across my business.
I can learn from formal education providers, I can get new qualifications, or access professional development via online courses, masterminds or workshops. But equally, I can be responsible for my own learning via podcasts, books and videos online….and informal arrangements such as business buddies and masterminds.
Ultimately, I am interested in the important lessons I need to learn as a business owner, the ones that impact my business the most, the repeating patterns, the things I get triggered by, the blocks I have, the gaps in my knowledge. I tread carefully with these metrics though…just because you have learned a lesson doesn’t mean you have recovered from it, or had the opportunity to implement its learnings.
How aligned were you to your values this year? Your personal values and your business ones? How proud are you of the culture you are creating within your business for clients, collaborators, suppliers, staff and other stakeholders.
Are you OK with the decisions you have made this year? Are there choices you made that you on some level regret? Because that is OK too. None of us are perfect, but having an awareness of where you haven’t been completely aligned is helpful for getting yourself back on track.
Are people talking about you behind your back for the right reasons? Or do you need some reputation repair support?
Only you get to decide where the line is in your business, yes others may vote with their legs, or they might voice their dissatisfaction, but often this metric is actually more about how you want to show up, what you stand for and what you don’t.
What you measure in your business matters. Because this will impact on how you move into 2022. If you only ever define your business success in monetary terms you will never really understand the true value of your business, and you as a leader.
Whatever the metrics say, you made it to the end of the year…make sure you celebrate that.
Get some rest…and then we get to go again next year.
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