I am all for the mantra of “what gets measured; gets done”. But that leads to an interesting question. How do we measure the success of an entrepreneur? Do we insert the dreaded KPI? Do we look at sales figures and revenue? Do we look at staff count and retention? As in Net Asset Ratio; Gross Profit Margin; Cash Flow or some other accounting based metric?
In my opinion these are hardcore business metrics and things that should certainly be measured. In a business context. But are these the correct metrics to measure an individual; bearing in mind we are talking about measuring the entrepreneur.
I think that we also need to place a fair amount of emphasis on where the entrepreneur is in their journey. For instance; are they literally just starting out and still conceptualising their idea? Or are they already a little further down the road and have an MVP and are starting to knock down doors and make an impact?
If it is the latter; then the following are likely to apply:
- Leads generated: You have got to make contact with your audience to do business, right? Sadly, many entrepreneurs prefer the “if you build it; they will come” style of doing thing. By getting really focused on this metric, you can decide on the best ways to spend your precious marketing budget. Get out there and engage with your audience!
- Leads converted: Once you have made contact with someone; your job is not done; you have got to know exactly what percentage of your generated leads actually become customers. By having a sound understanding of your lead conversion numbers can help you refine your ideal customer and core message.
- Average basket size: Generally we don’t think about average transaction sizes. We are too busy looking at the gross revenue and bottom line. Having your finger on the pulse of your average transaction lets you see what’s working and what’s not. This is where you learn if your pricing is right or not.
Yes – you will have already made the link that these are all pretty much “sales” metrics. And they are.
Being an entrepreneur is more about sales & growth-hacking than about being your own boss! The ability to be agile and to think differently about delivering a solution are excellent characteristics – and probably mandatory ones – for being an entrepreneur. The fact that you can bootstrap your way to a solution and get this done is fantastic! The real trick though is – can you convince someone to take a chance on you and to buy your product or service?! In essence; the ability to influence your audience is something that should be measured.
If I had to boil it down to just one metric; I would use “connectivity”. How connected are you with your market; with your competitors; with those who can influence your company direction.
What are some of the metrics or measures you have used to measure the success of being an entrepreneur?