Anyone can start a business, but actually getting it to survive the competition and making it thrive is the real deal. While there are many who take the bold step and launch their business, why is it that some reach great heights while some simply sink in the competition? The difference lies in self-evaluation. Entrepreneurs take a lot of effort to lay down a business plan, but not all of them take time to halt and periodically evaluate their progress. Quoting Jim Rohn here Sebastian Greenwood said, “If you don’t design your own life plan, chances are you’ll fall into someone else’s plan. And guess what they have planned for you? Not much.” He mentioned this to emphasize the importance of planning and along with planning one other thing that matters the most, according to him, is to track your progress to see whether you are on the right track.
Measure the gross margin
The size of the profit margin is one of the most crucial metrics that cannot be ignored. It denotes the actual profit made by the business after bearing all the costs. Return on the investment would be a good thing to look at, but gross profit margin is the actual amount left behind at hand. Only when the plan is proceeding positively and productively would the percentage of profit margin be high.
Operation costs and overhead costs are to be tracked continuously to find where all the money is being spent. Some overhead costs cannot be reduced and eventually eliminated wherever possible. Entrepreneurs who do not pay close attention to the overhead costs have lost huge amounts without even realizing. Tracking overhead costs would come in handy to alter business plans and budgets as and how required.
This is an actual indicator that shows where your company stands in the market. A relative measure of the market share would show the significance of the business in the market and how well it has managed to survive in the competition. While the other metrics indicate the performance of the business as a separate unit, the market share is the metric that compares it with the other similar players and their performance.
As Sebastian Greenwood quotes Og Mandino, “Always do your best. What you plant now, you will harvest later.” So in the early stages of your business pay attention to the finest details and measure the essential metrics to measure the growth of your business.
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Twitter – https://twitter.com/sebastiantruth