Reviewing Your Performance

So, your work from home business has made it through it’s first year. When you quit your job, you probably thought you’d left performance reviews behind forever, but here’s the bad news. It’s actually a very good idea to review your own performance as head of your own company, and take a good hard look back to see what you did well and what you didn’t do so well.

Did You Make a Profit or a Loss?

The first, and most important, question to ask yourself is: what does your balance sheet look like? You need to honestly add up all the numbers — don't be tempted to include money that you hope to be receiving in a few days, or remove bad purchases that proved useful in your personal life, for example. Hopefully you kept electronic records, so this shouldn't be a problem.

Once you know how well you’ve done, you should try to determine how you can do even better. If you had a loss (as almost everyone does in their first year), what can you do to change this situation? Where did all your money go? If you made a profit then, congratulations!

However, you should still determine how much of your profit to re-invest into the business, and how you can increase your profits next year. Remember, money makes money: once you're making a profit, wise investments can make it grow exponentially.

How Many Customers Did You Get?

Now, take a look at your customer database. How many people dealt with you this year? How many does that work out to 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 actually received, you need to determine if you were spending too much on expenses. If it seems like hardly anything, then you might be 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.

How Many Came Back?

Of course, a more important determining factor than the total number of customers for the year is how many returned more than once. Work out what percentage of your business was repeat business — this means you count someone twice if they bought from you three times overall, three times if they bought from you four times, and so on.

An easy way to do this is to simply take your number of how many times a customer dealt with you, subtract one, and then add it all 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?

What Did Customer Complaints Say?

I hope you keep every customer complaint you get, even if you fixed the situation. You need to take a hard look at what you did right, what you did wrong and where you messed up completely.

You probably dealt with situations as they arose, but looking back can help you to see the big picture. It's quite easy to miss simple patterns when you're in the thick of it day-to-day, and looking at complaints can reveal a trend that you might not have expected.

What Have You Learned?

It can be useful to write out a list of lessons you’ve learned at the end of the year, even if it’s something like ‘quarter-page magazine ads are just as effective as half-page ones’ or ‘make lunch later in the day so I can eat it faster’.

Your accumulated knowledge is valuable since you've paid for it in cash and in sweat, so make sure you keep track and don't forget it. See if you can come up with a list of positive things to do next year as well to make your business becomes even more successful!

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The fastest-growing segment of today's economy is the home business, but "firing your boss" is not as easy as some would have you believe.

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