Is Your Business Successful Enough?

Image credit: Monkey Business Images/Shutterstock

Here are the three questions every entrepreneur needs to ask herself or himself to properly evaluate their company.

As I reflect on the recent volatility in the stock market and consider that many entrepreneurs dream of one day bringing their companies to an initial public offering or another significant financial event, I question how many truly have the stomach for that reality.

One thing I’ve learned over the course of my career that’s helped me weather the storm is that rather than aiming toward financial exits and paydays to declare financial success for a business, focus on your end goal, such as having created a unique solution or service for your focused customers that is world class, and the milestones that dot that journey.

Aiming toward a specific financial event is a lot like saying that achieving a specific metric or key performance indicator is achieving “success.” True success is much deeper and can be tracked by milestones that accentuate the value of an overall business while satisfying various stakeholders.

To reach these milestones and achieve major success for your business, I suggest asking yourself the following three questions.

1. Am I changing the world?

Why did you embark on the entrepreneurial path? Likely, you identified a problem and saw a solution. Far too often, capital plans only reflect numbers that indicate paydays for investors. Has your solution made the world better in its own way? Set goals that will only be reached if your business’s mission statement is true and reflect the goals in your capital plan.

A pharmaceutical company might have the ultimate measure here, because it could set goals around the number of lives saved. For others, perhaps we focus on something more tactical. Are you a service provider that intends to bring a key product to an underserved market or region? Set a goal around the change you intend to create. Should businesses or customers grow as a result of your services or product? Set metrics around the type of growth they should expect. Prove the value of your business by holding yourself to changing the world.

2. Are my customers satisfied?

Investors might suggest that they are your most important constituency, but without a demand for your product or services, investors aren’t going to be very helpful. How do your customers view your company? Don’t just measure their satisfaction, set goals to sustain it and improve the score. Consider putting your money where your mouth is – make customer satisfaction a component of every employee’s bonus plan.

For example, a lot of technology companies have the advantage of bringing customers together for annual summits, seminars, and events to thank them, keep them updated on new products, and troubleshoot items that need fixing. On a more local level, some excellent real estate agents host an annual party or cookout to do something similar – celebrate the neighborhood and the people they serve. If meeting customers in-person at events isn’t possible, there are other ways to gauge how they feel. Do you conduct follow-up surveys? Do you see a trend toward repeat business? Are you responding to consistent feedback with a new service?

There are countless methods for understanding a customer’s perspective. What meaningful goals can you set that help you grow business?

3. How close am I to achieving 100 percent of an annual plan?

Accurately planning an entire year’s worth of business and coming as close as possible to the aspirations you set out to achieve is an indication of success for a number of reasons. This is particularly difficult, because entrepreneurs have more than just their priorities at stake. We can’t devise an underwhelming annual plan just so we can say we’ve achieved 100 percent – our investors, stakeholders and other constituents wouldn’t support that. Additionally, we can’t shoot for the moon – falling too short can be drastic for the business. We have to honestly balance the realistic with the aspirational.

Coming within a close range of completing an annual plan matters for an entrepreneur’s financial success. First, it proves they are capable of achieving success long term. Second, it’s proof of their leadership quality – specifically, their command of a team and an understanding of the motivations at play. Third, it puts success into perspective – what good is a year of success if the entrepreneur cannot strategize to do it consistently? When entrepreneurs come as close as humanly possible to achieving their annual plans, they’re more likely to make a trend out of the habit.

Sustained financial success is challenging. Milestones help us make sense of the path to achieving our goals, plus they help us track our progress along the way. To get there, entrepreneurs have to be extremely honest with themselves and ask probing questions that aren’t always comfortable. But if the expectation is greatness, it’s worth asking these three questions over and over again. Have you asked yourself these questions lately?

Rob Reid

With more than 30 years’ experience in the software industry, Rob Reid has a proven track record of driving explosive growth at innovative companies and has demonstrated a deep expertise in bringing cloud computing to the world of business applications.