When you are running your own business it is natural that you want it to grow. In fact, if I asked you what your goals were for your construction business you would probably say reaching profit goals, like £1,000,000 or more. This is a natural and vital part of having a healthy business. However, with growth can come some issues if you are not measuring your performance correctly. This can be seen in the fact that hundreds of construction companies go bust every month, in some part because of taking on too much work too quickly.
I also have seen this time and time again with my coaching clients. You might be reaching growth milestones but if you grow quickly you may start to feel a bit out of control. Business may be coming in fast but can you cope with the capacity? You may have invested time and money into advertising but you couldn’t say which is giving you the best return on your investment. You are not sure why you seem to have a lot of clients stuck in one part of your sales process. And you couldn’t say what you are doing for your clients that makes you stand out from your competition.
Not knowing the answers in these areas can leave you feeling stressed and finding it difficult to manage the work coming in. You will have no idea what is working and what isn’t. You will be running your business purely on your gut intuition.
Good reporting is going to help you keep your sanity and continue to grow at the pace that you will be happy with. If you are measuring something by way of regular reports then you can manage any problems that may be happening, or in the case of a positive effect carry on doing it. By measuring the right things consistently you will see your business continue to become more profitable.
But is it really worth it? Isn’t it just time and effort you could spend actually doing the work and earning the money? Let’s see first of all why you should be keeping regular reports.
If I asked you right now the answers to these questions – would you know the answer?
- What is your most profitable product?
- What is your best advertising channel?
- How do your customers feel about your service?
- What are you doing well?
- What problem needs to be solved immediately?
You may have an idea of the answer, but do you have the data to back it up? It can be easy when your business is growing to lose track of the different parts of your company, but it’s absolutely crucial for you to know exactly what is going on in every area. This not only will ensure that your business is managed properly, but also that you have an advantage over your competitors. And who doesn’t want that?
It isn’t enough to just collect the data though, you need to make sure you are giving yourself enough time to actually analyse them properly. And then you need to share the information with your employees and help them to interpret the data. This builds good communication between teams and helps hold them accountable.
So what should be measured in these reports? In this article, I am going to talk about three different areas that need to be measured to have a clear idea of your business performance. You should:
- Measure marketing
- Measure sales
- Measure client care
Marketing can mean the difference between a healthy business and a dead one. Without marketing you will have no leads, without leads you will have no sales, and no sales means no profit.
Reviewing your marketing strategy regularly can help you to see how effective your marketing efforts are at the moment and where your leads are coming from. A lead source report will help you to keep track and measure which of your leads are the most profitable. For every lead you have, make sure that you know where it has come from and made a note of it on this report. To help you with this, it’s very important that whoever responds to enquiries is trained to always ask “how did you hear about us?”. Make sure that this is also on any web form enquiries. If you notice any changes in where most of your leads are coming from you can then take further action if needed.
Social media is an area that most businesses are putting time, effort and even money into advertising. However, a lot of time can be wasted on social media if you are not careful. Make good use of the reporting functions on the backend of these platforms. Are people looking at your posts? Are they engaging and sharing them? Are your followers increasing? How many leads are you getting from different platforms?
Return on investment (or ROI) is another vital report to look at each month. Most marketing costs money, so you want to track how much you are spending and where the best place to invest that precious cash is. After inputting your costs your CRM system should make it easy to track which lead source received the most sales and how much it cost you for each one. Then you can make adjustments. For example, we noticed that it was quite expensive to get leads through Adwords, so we cut back on that marketing spend. But on the other hand, we know that our signage has great ROI, so we are happy to invest in making sure all of our jobs have banners and signs put up.
Once you have this data for six to twelve months, you’ll start to see a picture of what’s working and what’s not. Don’t be afraid to stop investing in a certain channel if it’s not giving you what you want back. That the key benefit of keeping a close eye on your reports, you can make the adjustments that are going to benefit your business.
Sales are what we are all after. The bigger your company grows then the pressure to keep up with your sales also grows. If your sales start to dry up then you are on the road to your business going under. Especially at this time overheads are higher than ever and you need sales to stay afloat and keep your business going.
By measuring how your sales team are performing and how your sales targets are going you will be able to see what can be improved. Firstly it’s a good idea to see how each of your salespeople is doing individually. This is important especially if you are linking performance to commission or bonuses.
I have a system that I track in a spreadsheet each quarter. It keeps data on:
- How many appointments have been visited
- How many quotes were sent
- The value of the combined quotes
- The win rate
- The time between visiting appointment and quote delivered
This last category is a really good one to keep track of to measure sales. If the time between is too high it may be a sign that your salesperson is either overloaded with work or not prioritising sending out quotes. From experience, I can tell you that the longer it takes for a quote to be sent the less chance you have of winning that job.
Another vital area to measure with your sales is your pipeline. This segments each stage of the process and you should be able to see just at a glance where you are with each individual client. Your CRM system can identify where in the sales funnel they are and how close you are to landing the sale. If you see that clients are stuck in a particular part of the process then you can get your sales team to prioritise moving them through to the next stage of the funnel.
We like to track 6 areas of our pipeline:
- How many leads we have
- How many have had an appointment
- How many have had a quote
- How many have been chased up
- How many are in negotiation
- How many have been won
By doing this we see not only areas of improvement but also can forecast future sales. By combining both sets of data, the sales data and pipeline data, you can measure the win rate and the average time taken from sending a quote to closing a sale. We can then forecast an average of what you will close in how much time. By monitoring this information closely it also is less overwhelming to measure sales. No need to panic about your whole sales process when you can clearly see where the work needs to be focused and makes it more manageable.
Exceptional customer service is one area that is vital to growing a business. To maintain a high standard of customer care you need to measure performance. The easiest way to do this is simply to talk to your clients. You can use a simple feedback form and ask them to score you on things like employee performance, and where you could improve.
When you get a bad review or report try not to take it too personally. It will happen, especially as you can’t please everyone. Take what you can from it and use it as an opportunity to grow. Then move on. You can even use the overall performance score to set targets for your team. Keep your best score somewhere that everyone can see and make it your aim each month to beat the last month’s score.
So there you have it, three areas you need to make sure you are measuring today. If you do nothing else then please:
- Connect CRM to lead source
- Look at your social media reports monthly
- Set-up ROI reports
- Look at your pipeline in your CRM
- Set up a client care report
If this all seems a bit overwhelming and you would like help measuring your business performance then feel free to reach out to me for a FREE phone call consultation to see how I can help. My Develop Mastermind coaching course has been designed to help construction companies like yours grow and set targets based on your data.
To see how coaching helped one construction company grow to win £950,000 of construction projects in one month, check out this video.