Great businesses come in many shapes and sizes. It's impossible to look at any one metric and decide if a company is "good" or "bad," but chances are if a business does all of the below, they're a top performer.
Item 1 - Audited Financial Statements
This sounds super boring but, honestly, if you don't have an outside accounting firm auditing your financial statements, you're probably not going to get much further than $10m in revenue and will have incredible difficulty if you ever want to sell outright or take some chips off the table.
Moreover, enhancing the quality of your financial statements will give you peace of mind as an owner, and more useful insights into the financial health of your company.
Item 2 - Consistent KPIs
Key performance indicators are the lighthouses you look for when steering the ship through the choppy waters of ownership. If your only goal is to stay in business, you probably won't for long. The best companies have very specific and measurable goals that they work toward on a quarter-by-quarter basis.
"The best way to predict the future is to create it." -Peter Drucker
Item 3 - Directionally Positive Financials
Revenue growth, net margins, and market share should generally trend in a positive direction. Of course this may not be true over every single measurable period, but consistently positive numbers are the hallmark of a top-performing company.
Item 4 - Regularly Measure Employee Engagement
Replacing an employee is incredibly expensive and time consuming. So too is hanging onto an underperformer. The best companies have set measurables for employee engagement and satisfaction, and review these metrics with their people on a consistent basis. Bonus points if employee compensation is tied to pre-determined goals.
Item 5 - A Clear Business Plan
Having a mission and vision that directly influence short and long-term goals are table stakes for a best-in-class business. If you don't know where to start, use something like the Entrepreneurial Operating System (EOS).
Make sure you keep it simple.
Item 6 - Set (and meet) Deadlines
Small and large tasks should all come with deadlines. Projects should be divided into achievable milestones and assigned to specific people with clear due dates.
The best companies implement and meet deadlines not as a scare tactic, but as a way to keep systems and processes moving forward.
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