Performance Measures to Manage SME Growth

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While most business owners would agree that business growth is desirable, those who have achieved significant growth will acknowledge that managing the growth is an integral part of the process and can be challenging.

A number of research studies indicate that performance measurement systems have an important role to play in this growth management. It has been found that growth orientated owner managers hold a higher proportion of performance measures than non growth businesses.

If you are in a phase of business growth, you may wish to consider the benefits of using effective performance measures.

Benefits of Performance Measurement for Managing Business Growth

  • monitor your past performance
  • compare your performance with your competitors and others
  • track and develop customer relationships -  customer orientation has a significant and positive impact on sales growth and profitability
  • anticipate changes and respond accordingly – vital in today’s market
  • reduce business risk
  • achieve significant financial savings
  • link your long term strategy to operational performance

Ways to Improve the Effectiveness of Performance Measurement

  • choose a limited number of measures
  • select a mix of qualitative and quantitative measures
  • have targets for your measures
  • review your measures regularly as your business and the external environment changes
  • measure “the right things”
  • avoid excessive measurement

A Final Word

Top management commitment is a major factor influencing the success of performance measurement systems. Businesses in the SME sector are likely to have more limited resources and can benefit from external expertise to implement performance measurement systems. It has been found that such systems play a key role in supporting managerial growth in SMEs.

If you would like help designing or implementing an appropriate set of performance measures for your business, with tips for reviewing your measures on an ongoing basis, contact us.

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