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Periodically Review Your Performance

A home based business is a business whose primary office is in the owner’s home. The business can be any size or any type as long as the office itself is located in a home.

What is performance: operation: process or manner of functioning or operating; “the power of its engine determine its operation”; “the plane’s operation in high winds”; “they compared the cooking performance of each oven”; “the jet’s performance conformed to high standards”

So you’ve made it through your first year. When you quit your job, you probably thought you’d escaped performance reviews for good, but I’ve got some bad news for you. It’s actually a really good idea to review your performance at your own company, to take a look back and see what you did wrong and what you did right.

Now, take a look at your customer database. What’s the total number of people who dealt with you this year? How many is that per day, and how much did each one spend? Once you have this information, you can work out how much customers were paying you overall weekly, daily or even hourly. If it seems like a lot more than you saw, you need to ask yourself if you spent too much of their money on expenses. If it seems like hardly anything, then you’re in trouble. Sorry to be blunt, but either you need to consider raising your prices, or you’re just not doing enough marketing or working hard enough.

Of course, a more important metric than the total number of customers you had last year is how many of them came back more than once. Work out what percentage of your business that was repeat business — note that this means you count someone twice if they bought from you three times overall, three times if they bought from you four, and so on.

An easy way to do this is to simply take your number that says how many times a customer has dealt with you, subtract one from all of them, and then add it up. Once you know the raw amount of repeat business, you need to divide it by your total number of customers and then multiply by 100. This gives you a percentage. If your repeat business is lower than 20% or so of your total business, this is cause for concern. Are you doing enough to stay in touch with your existing customers?

It can be useful to write yourself out a list of lessons at the end of the year, even if it’s things like ‘quarter-page magazine ads are just as effective as half-page ones’ or ‘make lunch later in the day so you eat it faster’. Your accumulated knowledge is valuable: you’ve paid for it in cash and in sweat, so make sure you don’t forget it. See if you can come up with a list of positive things to do next year to make your business even better!

A Home based business can be extremely rewarding, but please do not going into this thinking that it will be cake walk because I guarantee you,that cake is the only thing you will be able to afford.

“The first rule of business is: Do other men for they would do you.”
Charles Dickens.

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