In Part 1, I explained that there are two ways to respond to the recession we’re currently in the midst of: by getting bitter or getting better. I wrote that, if you are serious about surviving and thriving past this recession, you need to get serious about getting better in all aspects of your business. But first, you need to measure your business’ performance. Remember: performance measured is performance gained. I mentioned seven places to measure your performance. Here are the last four —

#4. Measure your closing ratio and average order. Closing ratio should be measured in relation to the number of people who came in the door to sample your product or service or in relation to the number of estimates you delivered to prospective customers. Both numbers are vital in making your forecast calculations. Most companies have more than one person who impacts the closing ratio. I often work with clients to create a system that will best separate and measure individual closing ratios. Even if your company has a team culture, you still need to know exactly how each member is contributing to the team’s overall results. Your company’s average closing ratio could be 20 percent, or it could be 80 percent.  If the closing ratio and/or the average order is too low, a good solution would be to invest in sales training. But, you can’t evaluate the true ROI on the sales training program you select if you don’t know exactly what you started out with. Remember that performance measured is performance gained.

#5. Measure your product or service offerings in margins. What I see a lot of small company owners do is look at their revenues in one lump as the annual total. But, what you should do is run separate P & L’s (profit and loss statements) for each of your offerings. If your company sells four main services, you should know how they rank in terms of margins, not just in terms of the total sales volume they equaled together. You can’t keep an eye on the bottom line (net profits) if  you are too focused on the top line (sales revenues). Remember that performance measured is performance gained.

#6. Measure your weekly P&L. In a normal economy, I would recommend doing this on a monthly basis, but in a recession it is important that you know the financial snapshot of your company on a weekly basis, particularly if cash flow is already uncomfortably tight. That means you need to have a reliable bookkeeper that can stay on top of invoicing, bills and reports. Your bookkeeper also needs to be readily accessible, so you can get your information in a timely manner. Remember that performance measured is performance gained.

#7. Measure your staff productivity. The starting place for this was in step 1 where your staff filled out their PDR forms. Now, what will you do with that information? Do you know how long it should take for larger projects or tasks to get accomplished?   You could have someone on your payroll at $20 an hour who takes 20 hours to complete a task or you could have someone else who is $40 an hour who can deliver the project in two hours. By measuring staff productivity you will find that cheaper doesn’t always mean cost effective.

Remember, you made a decision to get better and not grow bitter. But, keep in mind that getting better is a process. Don’t expect overnight results. People’s reactions are always based on their expectations. So, don’t set yourself up for frustration or failure with the wrong expectations. Taking measurements is a process that takes time to collect accurate calculations and reports. Once you have gathered all this important data, your efforts at leveraging your strengths and reinforcing your weak spots will be all the more effective. So, remember: performance measured is performance gained.

Written originally for w2wlink by Yoon Cannon.