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It turns out that there are quite a number of ways to decipher your enterprise’s current position on the growth ladder. If you’d like to find out how well your business is doing, you can have a look at one (or a combination of) these metrics:
Revenue
Your business’s revenue is the total amount of money that it generates from the sale of its products or services within a given period. This could happen because you’re selling each unit of your product at a higher price, selling more to existing customers, or selling to more clients. An increase in revenue is seen as a sign of business growth. However, be sure to view a rise in income against climbing expenses, as the former often suggests the latter.Market Share
This indicates the degree to which your business dominates in the market that it targets, relative to its competitors. It refers to the volume of goods your business sells, as a proportion of the total sales made in its market. If your company’s share of the market is rising persistently, it’s a sign that it’s growing. This indicates that your firm is outperforming its competitors.Customer Acquisition
Another metric you’ll want to watch out for is how many customers you’re gaining. Most businesses grow by getting more people (or organizations) to purchase their products or services. This measuring rule is especially credible if the increase in the number of clients corresponds to a rise in the value of sales being made (and, consequently, a boost to the business’s market share). You can acquire more customers if you join Club Connect. You’ll get more conversions and engagements with our discounted advertising plans readily available to you.Sign up for the Connect Nigeria daily newsletter
Client Retention
While it’s great to pick up more customers, you should also focus on keeping existing ones happy so that they remain loyal to your brand. Your ability to maintain your current client base will determine the extent to which you’re able to sustain and expand your share of the market. Business growth takes place when your clients buy more and pay more for your offerings.Profit
Your business’s profit is the difference between its revenues and expenses. It’s what’s left after you’ve subtracted the fixed and variable costs of producing your products or services (including administrative concerns). Healthy businesses are able to sustain an increase in their profit margins over the long haul, and other (external) factors are held constant.Calculating Your Business Growth Rate
You can calculate how fast your business is growing with any of the metrics we’ve mentioned above. Just plug one of them into the formula below, and calculate:Register to attend the CN Business Mixer
Growth Rate꓿ (Second Value – First Value/First Value) × 100%
Here’s an example. Let’s say that your business had a profit of ₦15 million in 2021 and ₦20 million in 2022. Here’s what the calculation would look like: Second Value – First Value꓿ ₦20,000,000 − ₦15,000,000꓿ ₦5,000,000 Growth Rate ꓿ ₦5,000,000/₦15,000,000 × 100%꓿ 33.3% So your business grew 33.3% between 2021 and 2022.Final Words
It’s important for you to know how to calculate the rate at which your business is growing. If you know how to do this, you’ll be able to tell how well your business is performing, and whether it needs shaking up to do better. Featured Image Source: Cloudblue PSAGot a suggestion? Contact us: editor@connectnigeria.com
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