Tracking in Small Business

To Track Or Not To Track?

If you are a small business owner you likely either have a website or know you need one. If you’re the shop around the corner, you may not yet realize just how important tracking will be to your small business. After all you may rely heavily on word of mouth or well-known repeat customers.

But no matter how welcoming your store and no matter how strong your relationships with existing customers may be, having a website and tracking your results with concrete, tangible numbers can have a serious impact on your long-term success. Forbes says not tracking results is one of the 10 most common mistakes that small businesses make. Let’s take a closer look at why that’s the case!

Mistake: You don’t track results

This is more common for more developed businesses, but it’s also one of the worst offenses.

If you don’t track, you really don’t know what works. Whether it’s not tracking goals on your website with Google Analytics, or not tracking conversions through your pay per click ads, or not tracking calls and foot traffic from a big sale or advertising investment, if you aren’t tracking, you’re throwing your money away.

As a wise person once said, it’s okay to make mistakes, so long as you learn from them. If you’re not tracking, there’s no way to learn from your mistakes. Heck, there’s no way to even know if you made a mistake.

Worst of all, if you don’t track, then there’s really no way to improve. That is truly a waste of a marketing budget.

By starting to analyze how their paid efforts were converting, System ID, a small business in Texas, realized that a large number of the customers who converted after clicking an ad, came in on keywords directly related to a subset of their products. Be redirecting a portion of their budget to acquire these customers, they were able to reduce their cost per click by almost over 20% in less than 3 months, while getting in touch with more of their highest value leads.
– via Forbes

Are You Overlooking These Metrics?

Even if they’re already sold on how much tracking their success matters, many small business owners can overlook a few key metrics that they would benefit from tracking. Especially when you’re running your store day in and day out, it’s easy to feel that you can rely on your gut sense of ebb and flow for things like seasonality in your business. But tracking these details with concrete numbers can yield insights you just won’t get any other way.
Here’s why…

If you’re a product-based businesses, determine the true cost of each product compared to how much you’re selling it for and then make note of the average price for similar products among competitors. You might need to raise prices in order to make a profit or stop selling that product overall. Products with the highest gross margin are your most profitable products. You need to make sure you track the gross margin (revenue of product minus cost of goods) accurately in order to understand which products are your “best” products.

Seasonality

Even if your business isn’t completely tied to a certain season, every business owner sees some sort of fluctuation over seasons. You might see increases during holidays or when the weather is particularly hot or cold, or wet or dry. For example, a fitness consulting company might see an increase in customers right around the New Year as people make resolutions, or maybe during the summer when customers want to get in better shape.

Understanding seasonal fluctuations helps you properly plan for big expenses. Business owners should look at 2-5 years of trends to truly understand when they can expect slow or busy times. They should then plan accordingly. Maybe they need to hire more employees during certain seasons or reduce inventory in anticipation of lower demand. They might want to have a credit line to help them with cash flow when sales are slower. – via Inc.com

What are you tracking in your small business? Could you benefit from tracking a few more key metrics in how your business is running?