Don’t just make a change to your business; measure it
Have you made serious changes to your business this year? Have you invested in new technology, systems or training, for example, in a bid to boost your efficiency, productivity or customer service?
How’s that going for you?
It’s a serious question and it actually deserves a lot of thought. Can you answer with a dollar value? If not, maybe now is a good time to take a closer look at those changes and evaluate the return you’re getting on your investment?
Not measuring your ROI is a bit like doing all the training, running an entire marathon, and then at the end of the race not checking where you finished or what time you did. Sure, you’ve had the experience — and you know you feel fitter and that your feet hurt — but you’re not quantifiably certain how well you did. How do you know how well you’ve done? And how will you know you’ve improved when you run your next one?
Being able to quantify the return on any investment is vital to your business success. How else do you know whether that investment was money well spent, whether it’s underperforming or if more improvements could help you become more profitable?
Perhaps it’s calculating how many more widgets a new machine helped you produce or how many more customers you were able to serve. The important point is being able to somehow quantify the return on investment, rather than going on your gut feeling.
Plan beforehand; measure afterwards
Sometimes obtaining a specific “number” can be a little difficult. How do you know an improvement was down to a specific investment? Or what if it’s something less “tangible”, like you wanted to improve employee happiness, for example? Find a metric that can act as a marker of success and track it. Has your staff retention rate improved since you made the change? Or if you’ve improved workflows, how many hours have you saved for the same result?
Tracking the effects of improvements to, and investments in, your business can be difficult. You’re busy running the day-to-day operations; you’re focused on getting the job done, finding new clients — whatever it may be. You probably feel you don’t have enough hours in the day to do what you have to do as it is, without going over your books with a fine tooth comb to assess the ROI of one particular investment.
Reep can help. Reep is accounting software that allows small-business owners to take a “helicopter view” of their financials and track how one investment has a follow-on effect through the rest of their business.
And it’s not just retrospective. Reep can help business owners evaluate investments before they decide to make the investment in the first place, through its scenario planning capabilities. This gives business owners the chance to ask themselves “what if?” before they make a change to their business.
Why not try Reep for your business?