This is the question on the mind of every entrepreneur: is the business they’ve built successful, will it stand the test of time, weather the difficulties that every business encounters and keep paying its employees, turning a profit and delivering a good service?
If it doesn’t, or you can’t be sure, you’re going to be worrying about the business you’ve built, and also yourself. You’re the one taking the big decisions and if those decisions are going wrong, there might be something wrong with your decision making!
To set your mind at rest and help you plan for the future, you need a way to answer that question. Unfortunately there’s no single way to measure success: cashflow is a good indicator of course: if you’re making more money than you’re spending then you’re on stable footing, but you have no way of knowing if this just a temporary quirk of the market, a fad or fashion or the foundation of long term success. And of course there are plenty of phases of development for a successful business where you do spend more than you take in revenue: investing in your infrastructure, in marketing, in developing new products and designs are all necessary for business success and they all eat up money. That’s what investors are for!
Growth is another good indicator – if your business is growing you’re doing something right. However, growth can be measured in many ways: in market share, in footfall and raw numbers of customers spending with you, in the sheer square footage of your business and the people you employee. You need to understand the conditions of the market to know whether your growth is healthy: if the demand for your services is bounded, and that bound is low, then you might find your growth running into a brick wall sooner rather than later and your period of success might come to an unceremonious end.
To understand the market and the position your business holds within it, you need to work with a market research company: they can organise the research you need to really see where your business stands. A brand tracker survey tells you whether consumers recognise your brand, and research into demand tells you whether there’s scope for you to keep picking up new business or if you need to diversify to capture more customers.
It’s only by gathering data that you can really put the question to rest, and know if you have a successful business.