Every startup entrepreneur should monitor the company’s growth closely, especially during its first 5 years. However, the definition of success could differ from one company to another (and from one entrepreneur to another).
Some define it by the number of customers served in a year, others by hitting sales targets, increasing brand recognition, greater investor confidence or simply survival after a 3 or 5-year existence. Surviving and thriving in the industry for over 5 years is an achievement by itself, considering that over 90% of US startups actually close shop before this period.
Whatever type of success should a company strive for, there are several metrics in place to help entrepreneurs track a company’s progress. Such metrics are also helpful in making sure that the company is still on the right path towards growth - these could include:
The best referrers you’ll ever get are your clients. Aside from increased sales and an increased customer base, this just means that your products/services were good enough to gain their recommendation.
This metric can tell you that your business has a competitive edge in your niche - because if your product was not worth it, why would your customers/clients recommend them to their own friends and family? Furthermore, this can help you save on expenses because there is no need to aggressively market your business, your clients can already spread the word for you.
Just like client referrals, a good number of repeat customers indicates that your products/services were great (and that they are happy to use it). Again, this is also an indication that your business has a competitive edge in the industry.
Entrepreneurs should actually watch this metric closely. For example, if you had over 1,000 customers at the start of the month, and only 5 to 10% of them came back by the next month, then there is clearly something wrong with your products/services or transaction processes.
Customer engagement is easily quantifiable today because of improvements in technology. Website visits for example can be easily tracked - including clicks and sign-ups (whenever necessary).
However, website traffic and clicks are not exactly engagements. Customer engagement should be quantified by the number of minutes/hours that a lead/customer spends on your page, how responsive and committed they are after signing up, and if they are participative enough in your Social Media pages.
High customer engagement means that there is a good relationship between you and the customers. This also means that customers have a huge trust for your brand, and they are more likely going to become repeat customers.
More investors could mean that your company is actually stable enough to gain their trust and confidence. An investor would not just bet on their money and see if your company would grow, they invest their money in the company because they have positive projections about the future of your business.
This metric however cannot stand alone. To procure a good standing here, you must have good ratings in the previous metrics too. That includes a good number of customer retention, referrals and engagements. Of course, this also means that you should have a stable income revenue as well.
Success of a startup, or any company for that matter, should not just be gauged on outside factors/output (such as sales, conversions and returns). It should also be measured from within. Employee conditions is a good metric too.
Remember, your employees are your best assets. If they are not performing well, it will have negative effects on your products/services and customer service. Low employee motivation and productivity also indicates that there is something wrong with the organization of the company, office environment or compensational benefits. A successful company knows how to retain its best employees, and it is organized enough to ensure that each employee is productive enough to do their jobs.
Some entrepreneurs also measure success by looking at their transactional processes. This could include the number of payment failures or cancelled subscriptions. Although these aren’t the typical indicators of success, looking at these factors can help improve the customer experience and service along the way.
When there’s a rising number of payment failures and subscription cancellations, it means that the company failed to deliver on the intended promise. This definitely affects revenues negatively, and will have a bad impact on your business as a whole.
Lastly, you have to make sure that your chosen metrics can be tracked and quantified. There are several apps and programs nowadays that can help you with this. Employee productivity may seem hard to track, but you can actually do this with the help of a competitive Human Resources (HR) department and a little effort to be personally involved with the day to day projects of your employees.
Gemma Reeves is a seasoned writer who enjoys creating helpful articles and interesting stories. She has worked with several clients across different industries such as advertising, online marketing, technology, healthcare, family matters, and more. She is also an aspiring entrepreneur who is engaged in assisting other aspiring entrepreneurs in finding the best office space for their business.
Check out her company here: FindMyWorkspace