Measuring business success: 3 key pillars to have on your radar

There’s a lot of noise when you have a fast growing business, writes Ben Lipschitz, CEO and cofounder at FoodByUs. So he offers the three pillars that have enabled his startup to really measure business success.

Everyone interprets business success according to their own values. For some startup owners it could be earning five-star reviews or achieving thousands of followers. Others focus on building a profitable balance sheet, creating a lasting legacy, or making a difference.

Amid the noise and clamour of leading a rapidly growing small business, you only have enough attention span and hours in the day to track the metrics that are most crucial to your operation’s health and success. Identifying what really matters – and blocking out what really doesn’t – is a critically important skill.

You can break those essentials down into three business pillars that most closely align with your values. As the CEO and co-founder of a rapidly growing startup, these are the three that have really enabled us to measure business success.

Pillar 1: Profitability

Regardless of whether your motivation for starting a business is altruistic, egotistic or purely financial, a key goal for any commercial venture has to be achieving profitability from the get-go. Having the best business case or the noblest cause means nothing if you can’t keep the lights on.

When we first came up with the idea for our business, it was to build something with tangible outcomes that benefit real people. To achieve that, we needed a sustainable revenue model from day one.

How do you get to profitability, and stay there? Access to data is critical. I spend a lot of time making sure we have the best possible insights when it comes to how our business is tracking. As a business owner, founder or MD/CEO, you need to get comfortable with looking at the numbers on a regular basis. Only then can you understand market cycles, changing consumer habits, and the impact a decline in sales may have on the profitability of your operation.

Tip: watch your cash flow

Spend wisely on things that matter, especially in the early phase. It’s easy to get swept up in the excitement of building a business and want everything to be the very best from the outset. I’ve seen businesses run dangerously close to running out of cash. They overspend on a big office space and fit-out.  Or order truckloads of branded merchandise. Or go big on parties and launches.

In recent times too, with competition for talent at fever pitch, some startups have been offering startlingly high salaries loaded with additional perks.

It’s tempting to go down this path when you’re trying to grow and recruit the best people. But we’re now seeing a number of companies having to lay off staff. When expenditure and revenue don’t match, getting caught short of cash and having to cut jobs creates the exact opposite impression to the one you intended.

Pillar 2: Genuine community impact

You could build a business that has a million users, but doesn’t actually benefit anyone. But if your desire is to create something that helps people or provides solutions, then you need to think about your community impact.

Think about the problem you’re trying to solve, and who you’re trying to solve it for. My co-founders and I love creating digital marketplaces and are experienced in hospitality. So we identified a problem in the industry for which a marketplace is a good solution, helping our customers to streamline their procurement processes, saving them time and money.

Tip: Engage your community

There are other ways to drive community impact. That could be donating a percentage of profit to a chosen charity, or engaging your team in regular community support initiatives. For B2B operations, you could add value for your customers by providing additional resources or education at no additional cost. Perhaps you can bring together industry leaders and run webinars or in-person events, or create e-books to pass on industry-specific knowledge.

It’s not just about sleeping soundly at night. A genuine desire to help your customers can give you daily motivation and set goals to keep developing and evolving. And the more helpful and useful your product is, the more customers you win, and the stronger your entire business becomes.

Pillar 3: Longevity

How do you make sure your business is one of the ones that is going to stick around for the long haul?

Most importantly, you have to plan ahead. So, think about where you want your business to be in two years from now, five years, and 10 or more years.

What are your goals for the business? If it’s to build and sell, then profitability is a crucial consideration. Also, you should start thinking about building systems and processes so that as the team grows and evolves, so does your own role as the founder or CEO.

Tip: Know your exit strategy

You should aim to become less operational and more strategic. With your focus on the big picture stuff, it’s easier to extract yourself when the time comes.

This is valid even if you’re not selling – stepping back to take a strategic overview can help the business grow or identify new markets.

Maybe your business plan only needs a few tweaks (or, perhaps, you need to create one for the first time). A shift in mindset, or a new focus, could be what’s needed to measure business success and keep your startup on the path to long-term, sustainable profitability.

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