When you’re looking to measure the success of your business, multiple factors need to be taken into consideration. Comparing yourself directly to similar businesses is not always the best way to gauge your or your competitors’ success, but looking at a variety of things will help you determine how your business measures up to others around the country. Here are some factors to look at when concluding how your business compares to others.
Of course the easiest way to measure success is in the numbers. The average small business in the United States has less than $2 million in annual sales, with an average net profit of 14.56 percent each year. Certain industries boast higher net profits, and the size of your business will greatly affect your overall annual sales and net profit percentage. Looking at your current profitability, as well as your profitability in the past and the projected numbers of the future, will help you see the tangible ways in which your business is growing and succeeding.
Is there a large market that utilizes your business’ products or services, and is your customer base projected to continue using your business? Do you know enough about your customers to anticipate their changing desires and are you shifting your business accordingly? Being aware of the market and knowing your customers is hugely important when it comes to measuring up against other businesses. You might have a great product or service, but if no one is using it or looking for it, then you don’t have a successful business.
Ability to Create Value
These days, a business’ success is not measured solely in great products and large profits. Your company’s ability to create value for your customers is absolutely imperative in today’s market. By providing a great product or service, offering exceptional customer service, and building long-term relationships with your customers, you create value that is, quite frankly, hard to find in many businesses these days.
Ability to Utilize Opportunities
Every business owner knows that risks will need to be taken and opportunity cost will need to be analyzed throughout the lifetime of a business. Businesses that stand out among competitors have a mind boggling ability to properly utilize the right opportunities in business. This can mean jumping on the social media bandwagon that you’ve previously avoided, forming a partnership with an individual who complements your skill set, knowing when to push through struggles and when to ask for help, and so much more. Your company’s ability to properly utilize the right opportunities can make all the difference when it comes to how your business measures up to other companies in the US.
- “How Does Business Measure Up?” http://blogs.iadb.org/partnerships-for-development/2015/05/21/business-measure/
- “What Is the Average Profit Margin for a Small Business?” http://smallbusiness.chron.com/average-profit-margin-small-business-23368.html