Your business is like a puzzle. You have to work on the small pieces to get to the big picture.
Remember measuring your height and marking your growth progress on a wall in your house? Wasn’t it exciting to see how much you’ve grown after each year?
Business is very much the same. Unfortunately, many people stop measuring after a while. Unlike measuring your height, the growth of your business requires regular measurement to help ensure you are on the right path. To help you get started on measuring your business we are going to talk about three of the seven very simple metrics we call “The Key Growth Indicators”. You can start using it immediately to measure the progress of your business.
How does your business measure up?
The 7 Key Growth Indicators
- Number of Clients
- Average Service Ticket (AST)
- Frequency of Visit (FOV)
- Price Increase
- New Client Acquisition
1. Number of Clients
Knowing how many clients you actively service in a 12-month period is one piece of the puzzle. It will provide you with an accurate measurement of your business and will give you a good indication of whether you have enough clients or if you need additional clients to get you to your next goal.
2. Average Service Ticket (AST)
The AST is measured by how much each client spends in services per visit. Take the amount of clients you service in a given period and divide it by the total service revenue within that period. This equals your AST. Ex:
- 25 clients per week
- Total revenue = $1200
- $1200 divided by 25 = $48
Your AST is $48.
Numbers don’t lie. It’s a true and accurate measurement of where you are. It’s a quick and simple way to keep score. Monitor daily or weekly to stay on track.
3. Frequency of Visit (FOV)
This is a simple yet powerful tool to use to help you increase your revenue. FOV indicates the average amount of visits a client makes per year. This is a crucial element of your business because the difference of 4 visits and 5 visits per year could be thousands of dollars depending on what your AST is. Sometimes you don’t necessarily need more new clients (at least not yet). Instead, look at how you can increase the number of times your existing clients visit you per year. Example:
Stayed tuned for Part 2 in our series where we will dive deeper into the four other measurements.