There’s an old acronym that holds a lot of value for business professionals starting a new venture: KISS. For the unaware, KISS stands for, “Keep It Simple, Stupid.” While it’s rather crude, its point remains valid. Entrepreneurs trying to get a new business off the ground need to focus on getting the big things right. Answering the basic questions and laying the groundwork is essential if you’re ever going to create a thriving business. However, this leads us to our question of the day: how detail-oriented should startups be? Is it more important to establish forward momentum in business, or is it preferable to sweat the small stuff and nit pick right from the beginning? Here’s how you can gauge the value of certain advanced metrics for your startup:
Follow the Money
Every entrepreneur should understand that the bottom line is the alpha and omega when it comes to analyzing their company’s success. Indeed, money-related metrics are some of the most valuable –– and frequently misused –– statistics across just about every industry. (After all, knowing when your dividend is about to be cut is pretty important for any burgeoning company.) Again, though: how intricate should you strive to be in your data analysis? Most businesses will prioritize their ROI for marketing spend, as well as investments in other projects. This is a fairly straightforward way to think about the effectiveness of your spending habits. However, it comes with a drawback; calculating general ROI, (or ROI in total) won’t clue you in on which specific projects, marketing efforts, or advertisements generated substantial returns for value, and which elements of your business spend you’re wasting money supporting. For example: consider a company that relies heavily on online advertising to drive leads to their website. This type of company would probably be better served calculating individual ROAS (return on ad spend) for each individual ad. Though this might sound like a lot of work, it’s critical for companies early in their existence to optimize their expenses.
Self Improvement vs. Market Study
For startups, it’s almost always more beneficial to begin with introspection before they expand outward. While it might be tempting to attempt a full-scale market study (complete with detailed assessments of direct competitors) it’s probably wiser to get your own house in order first. Though you can glean a lot of valuable intel from studying keyword search volume and domain-ranking metrics related to your competition, your first priority should be to streamline and maximize the effectiveness of your own marketing/sales team. One way to achieve this is through managing your technology, (i.e. your CRM) more efficiently. A Salesforce and Hosted VoIP integration, for example can provide entrepreneurs with metrics that can be applied toward self-improvement. And anything that allows a new business to optimize their sales tactics and close more deals is massively beneficial.
The Bottom Line
Humongous corporations and established companies have the advantage of time and resources to launch intricate studies and delve into obscure metrics. In general, startups don’t enjoy those same luxuries. However, that doesn’t mean a new business should completely eschew analyzing data; instead, small business owners need to understand the most important metrics in relation to their company and focus on them.
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