“Standards of measurement by which efficiency, performance, progress, or quality of a plan, process, or product can be assessed.”
There you have it, Folks. Even by definition, “metrics” sound incredibly boring. However, since they’re also necessary to running a successful business, I’ll do my best to make them as fun as I possibly can.
What does MWM look like to you? Well, depending on what font is used, to me, it looks a bit like a wave. And waves are fun. Surfing on ocean waves… Or doing “the” wave at a sporting event or stadium-sized concert. Good times to be had all around.
MWM also represents the three most important metrics you should be keeping track of: Money, Website stuff, and Money. (Yes, money comes up twice – it’s important!).
So let’s all do the wave (or ride it!) together, shall we? Come on. It’ll be fun.
Daily Metrics: Money
How much money have you earned today? Do you even know?
Don’t feel badly if you don’t. Most freelancers and solopreneurs are in the same boat – unless it’s payday, they have no idea how much money they’ve earned. Unlike our more traditionally employed counterparts, our paychecks tend to be irregular. And keeping up with our finances can be complicated.
However, as a freelancer or small business owner, it’s more important than ever to stay on top of your finances. Determining how much you earn is the number one way to suss out whether you’re making a profit or hemorrhaging.
So why track your money on a daily basis? Why not do it at the end of the year like everyone else? Oh, don’t worry – you’ll still be doing your end-of-the-year wrap up! But, by tracking your money on a daily basis, you’ll nab three additional benefits:
- Increased motivation. When you know that you’ll be holding yourself accountable for your finances at the end of each day, your motivation to do a “good job” increases. I always say there’s nothing like a little friendly competition – especially when it’s with yourself.
- Higher goal-achieving rate. I’m a big fan of goal-setting. And an even bigger fan of goal-achieving. By tacking on a numeric value to your daily goals, you’ll strive a little harder to succeed (see #1). And, if you fall short, you’ll be able to take immediate action to change your daily strategies.
- Help living one month ahead. When you know exactly how much you bring in each day, you can budget better overall. This will help you meet the budgeting “ideal” of living one month ahead.
Daily income tracking impossible, or simply not jiving with you? Try doing it weekly instead. You can still get your “daily” totals by taking your weekly total and dividing it by seven.
Monthly Metrics: Website Stuff
If you’ve gone into business for yourself, in this modern era, chances are you’ve got a website set up. Very smart.
However, even with the slickest design and catchiest copy, that website isn’t going to run itself. It still needs attention from you. And, you need to keep track of who else is giving it attention – namely, your potential customers. Try looking into your site’s…
Let’s get one thing straight: “Bounce Rate” has nothing to do with how long a visitor is browsing your site. There’s no 30-second “Rule” that determines which user is a bouncer by tracking how much time they’ve spent on your homepage.
Wikipedia’s collective intelligence (correctly) defines Bounce Rate as:
“[Bounce rate] represents the percentage of visitors who enter the site and “bounce” (leave the site) rather than continue viewing other pages within the same site.”
In other words, it shows you how well your site converts. By conversion, I mean, when a browser hits a page on your site, do they explore further, or do they leave right away? If your bounce rate is high, it could be time to do some rewrites or restructuring.
Average Time Per Visit
Just because bounce rate has nothing to do with the time spent on your site, doesn’t mean that this metric isn’t important – it is. Check to see how long visitors stay on your site, and how many actions do they take (e.g. clicking onto another page).
Although the recent algorithm changes mean that Google isn’t as heavily reliant on keywords as it once was, they’re still important. They help give you a rough idea of whether you’re bringing in your target audience or not. Because thousands of visitors mean nothing if they’re not there for what you’re selling.
If you’re selling freelance writing services, but your visitors are coming in by the droves for the keywords “plastic doll parts” (from that one article you did where you compared blogging to manufacturing baby dolls), then you’re still not quite hitting your target audience. But, if they’re coming in for things like “freelance writer” or “copywriting advice” then you’re probably on the right track.
Yearly Metrics: Money (Again)
Whether you’re a lone wolf or in charge of a few loyal employees, taking stock of your year-end assets is a must for any business owner. While your day-to-day income tracking tends to be fairly basic, your year-end metrics should include:
Revenue Per Client
This metric separates the good, the bad, and the ugly. All right; maybe not the ugly. But, if you notice a certain client is trailing behind all the others in the payment department, it could be time to either ask for a raise or cut them loose.
This metric will also help you to determine which of your products or services brings in the most income. Which will help you to know who your highest-paying target market is – an important bit of knowledge to have when planning the coming year’s marketing strategy.
Comings and Goings. Tracking where your money is going is nearly as important as where it came from. By tracking your losses as well as your profits, you’ll be able to more easily determine which areas of your life are a money suck. This is the metric that will help you get your priorities straight when developing next year’s budget.
How much money did you earn from month-to-month? Did your business have a surge of income at any point? Or did it drop off completely?
It may take you a couple of years to notice any major trends establishing, but, even on your first attempt, you’ll probably see some peaks and valleys. Take note of these for the coming year and save during the “peak” seasons so you’ll still be flush when you traipse into a “valley.”
Total Annual Revenue
In the end, it’s all about the bottom line: how much money did you make in total? And was it more than last year? Your total annual revenue is also a good indicator of your business’ total overall growth and projected longevity. If everything is going well, you should be seeing at least some increase from one year to the next.
So remember to ride the MWM wave and track the metrics that matter. They aren’t a replacement for professional accounting advice, but they’ll certainly help keep you on the right track.