When writing a business plan for your consultancy, each step should help your business to succeed. But before you begin you must define what success means to you. What metrics you choose may vary depending on your industry, business experience, and ultimate goals. You can measure success in multiple ways. The measurement techniques you choose may change over time as your business grows or your priorities shift. However, it’s important to have a clearly defined set of expectations to use to measure performance. Below are a few of the ways independent consultants may choose to measure their success.
One of the easiest and most obvious measures of success is your consultancy’s profit. By setting concrete goals of where you’d like your profit margin to be on a specific date, you’ll need a solid benchmark against which you can compare your performance. If this is your first year in business, you may need to research the profit margins of companies similar to yours. After your first year, you should compare both industry standards and your year-over-year profit margin. Keep in mind that many new businesses may not see income for the first few months; turning a profit could be several months away. Initial financial goals might come in the form of a target date for breaking even or a goal that measures income rather than profit.
2. Client Acquisition
Whether used in place of or in addition to financial benchmarks, a growing customer base can be an effective measure of success, especially for new independent consultants who are searching for a first client or for those who have recently altered or expanded their focus. This goal can be defined by a target client or project number, desired growth rate, or a milestone of quality, such as clients with a particular budget or project size.
3. Client Retention and Satisfaction
If the services you offer lend themselves to maintaining long-term or repeat clients, the quality of your client relationships can be another metric that can be used to measure success. Even if your consultancy’s services aren’t ones that often gain repeat business, you can still gauge client happiness and satisfaction rates to determine whether you have met your goals. Because of this, it’s important to be diligent about soliciting client feedback in a manner that is easily quantifiable, such as follow-up surveys or polls or through reviews. There are a number of free websites that specialize in this service, such as Survey Monkey, or you can create your own using Google Docs. Recommendations and referrals from clients can also be used as a gauge of their level of satisfaction.
4. Brand Recognition
Public familiarity with your brand and services can be the key to landing more and bigger clients when working to grow and expand a business, and both influences and is influenced by increased client acquisition. How you measure this metric will depend on your consultancy’s size, target client base and outreach methods, but can include measurements such as email newsletter subscription size, social media marketing community growth and engagement measured through the sites’ analytics, or mentions in blogs or other publications. What will your minimum goal be? Consider quantifying a number of mentions or impressions in your business plan.
5. Improved Direction, Focus and Productivity
Especially in the early stages of a new consultancy, success can mean learning from your experiences and making adjustments that will have long-term positive effects on your business. For example, if your consultancy hasn’t brought in the amount of income expected or your client base is small, but your experiences have helped you to improve your service, streamline your efficiency and define your expertise, you have made strides towards reaching your goals. Though these metrics are more difficult to measure than others, taking an inventory of the ways in which you and your consultancy have improved can help you adjust your business goals and realize future success.
Bonus: Personal Satisfaction
While feelings are impossible to quantify and difficult to correlate with the growth and longevity of your business, how you feel about your business can be a powerful secondary indicator of your potential to succeed as an independent consultant. If a young consultancy hasn’t quite met other predefined goals, but feels passionate and excited about where they’re going, success could be right around the corner! It’s a fact that independent workers in America are more happy and satisfied as a group than those in traditional job roles, so consider it a success to join the independent’s club.
How do you measure success? Tell us in the comments!