I know that spending more time in the office racking your brain over a bunch of numbers is the LAST thing that you want to do. Allow me to help you focus on the 5 key metrics for your green industry quarterly scorecard so that you can get the most out of them and get back to doing what your small business does best. These metrics can be used for each quarter, so you don't have to go back in and ange them every quarter. Trust me, it'll save you time and headaches at the end of each quarter when you're scrambling to figure out how to score.
1. Estimates
Hope for the best; prepare for the worst. That is a great motto for green industry business owners especially when estimating.
You should keep detailed running estimates of each quarter's revenue and expenses in order to budget and predict your earning potential. I prefer to make three estimates: an optimistic scenario, a middle scenario, and a pessimistic scenario. For the optimistic scenario, assume that everything goes well; you have maximum customers and maximum efficiency. For the pessimistic scenario, assume the worst; you have very few customers and low efficiency. The middle one will be somewhere in between. This system helps me see the big picture and helps me compare scenarios and predict the likelihood of achieving a certain outcome. I like to be prepared for anything.
Compare your estimates with your actual revenues and expenses after the period is over. Try to determine the reasons behind why or why not the estimates match the actual.
2. Weekly revenue
In a growing business, your weekly revenue can be very intuitive when it comes to predicting your progress and potential.
It is important to notice the patterns that come in your weekly revenue, or how much money you are making from sales without factoring in expenses. If your revenue is noticeably higher or lower than usual, you should try to look for reasons why in order to learn from it. You can also realize how your advertising or changes in operations effects your revenue.
3. Customer Satisfaction
The best way to monitor customer satisfaction is through satisfaction surveys. Follow up with an email survey for each customer. This will ensure that every customer's voice will be heard, and you can find out where you need to improve. Ask about how well and timely they thought the work was completed, how helpful the staff was, and whether they are likely to recommend you to a friend.
Surveys are also important so that you can recognize when customers are very dissatisfied, so you can try to make things right before they spread the word. If you handle a dissatisfied customer politely and professionally, you can right the wrong and leave the customer more satisfied than ever.
4. Operating Productivity
This is important for finding out how productive your staff is. This can reveal insights about the inner-workings of your company such as your strongest and weakest areas. If your staff is discontent, your business could be in real trouble. But, if your staff is happy and productive, they can be your best asset.
Another area to monitor for productivity is your equipment and machinery. If you have an old machine it could be dragging down your productivity and creating bottlenecks in the operating process. Be aware of when equipment needs to be replaced in order to be as productive, efficient and effective as possible.
5. Gross Margin
The gross margin can be calculated by subtracting the cost of goods sold from your sales revenue. You can also divide the gross margin by the total sales revenue to express this number as a percentage. The higher the percentage, the higher the earnings that your company retains.
Always be sure to monitor your gross margin whenever you make even minor operational changes. This helps you keep an eye on your spending in relation to your earnings and measure your efficiency as you continue to grow.
Download our latest ebook for insights to growing your business in the offseason.
