Reviewing Your Performance
So you've made it through your first year. When you quit your
job, you probably thought you'd escaped performance reviews for
good, but I've got some bad news for you. It's actually a really
good idea to review your performance at your own company, to
take a look back and see what you did wrong and what you did
right.
Did You Make a Profit or a Loss?
The first, and most important, question to answer is this: what
does your balance sheet look like? You need to honestly add up
all the numbers -- don't be tempted to add on money that you
think you're a few days from getting, or take away bad purchases
that proved useful in your personal life, for example. Hopefully
you kept electronic records, so this shouldn't be too much
trouble.
Once you know how you did, you need to look at how to do better.
If you made a loss (as almost everyone does in their first
year), what can you do about it? Where did the money go? If you
made a profit then, well, congratulations! But you still need to
think about how much of your profit to re-invest in the
business, and how you can increase your profits next year.
Remember that money makes money: once you're making a profit,
wise investment can make it grow exponentially.
How Many Customers Did You Get?
Now, take a look at your customer database. What's the total
number of people who dealt with you this year? How many is that
per day, and how much did each one spend? Once you have this
information, you can work out how much customers were paying you
overall weekly, daily or even hourly. If it seems like a lot
more than you saw, you need to ask yourself if you spent too
much of their money on expenses. If it seems like hardly
anything, then you're in trouble. Sorry to be blunt, but either
you need to consider raising your prices, or you're just not
doing enough marketing or working hard enough.
How Many Came Back?
Of course, a more important metric than the total number of
customers you had last year is how many of them came back more
than once. Work out what percentage of your business that was
repeat business -- note that this means you count someone twice
if they bought from you three times overall, three times if they
bought from you four, and so on.
An easy way to do this is to simply take your number that says
how many times a customer has dealt with you, subtract one from
all of them, and then add it up. Once you know the raw amount of
repeat business, you need to divide it by your total number of
customers and then multiply by 100. This gives you a percentage.
If your repeat business is lower than 20% or so of your total
business, this is cause for concern. Are you doing enough to
stay in touch with your existing customers?
What Did Customer Complaints Say?
I hope you kept hold of every customer complaint you got, even
if you fixed it at the time. You need to take a good look over
what you did right, what you did wrong and what you messed up. I
know you dealt with things as they came up, but looking back
over everything can help you to see the big picture. It's all
too easy to miss quite simple patterns when you're in the thick
of it day-to-day, and looking at the complaints can reveal a
trend that you weren't expecting.
What Have You Learned?
It can be useful to write yourself out a list of lessons at the
end of the year, even if it's things like 'quarter-page magazine
ads are just as effective as half-page ones' or 'make lunch
later in the day so you eat it faster'. Your accumulated
knowledge is valuable: you've paid for it in cash and in sweat,
so make sure you don't forget it. See if you can come up with a
list of positive things to do next year to make your business
even better!