How do you know if your business is on track with your goals? If you’re not where you want to be, how do you know what will take you there? This is where Key Performance Indicators (KPIs) are important for your business.
KPIs represent general performance and overall efficiency and you should measure them regularly. Information from various areas of your business helps you tell how well you are tracking against your business goals.
How do you measure success? To run your business as efficiently and productively as possible, you need to measure your performance. There are key components that you can look at to figure this out.
To identify your KPIs, ask yourself some questions. It may not always be obvious what the measures of your success are.
‘The right approach to performance measurement is like gravity. It pulls our attention and action toward a centre, toward the most important things we should focus on and improve.’ - Stacey Barr, performance management specialist.
You don’t want to settle on elements just because you can measure them. Monitoring takes time, energy, and resources so it’s important to pinpoint the right KPIs to tell you whether you’re achieving your goals. If you haven’t already articulated your goals, then it may be worthwhile to take a step back to do that.
Start by asking:
What is important to you? Reducing debt? Improving financial performance or increasing production?
What are some of your key concerns?
How has your business been performing? Who looks at this regularly and analyses what is being done right, what is potentially going wrong and what could be done better?
Look at the past year:
what worked and what didn’t?
Did you face any hardships that could’ve been prevented in some way?
If things didn’t go according to plan, where could you make improvements?
What do you see as some of the most important areas of your business?
What does success mean to you?
What is important to you? In the short term? What about longer term?
What are the elements that contribute to your businesses success?
How do you measure it?
It isn’t always easy to identify the right KPIs for your business. Start with a small number that are easy to understand and easy to discuss with your team. It will help you work out what’s really driving your business. Regular KPI monitoring is a powerful way to improve financial and operational results.
If you want some help with your KPI's, get in touch. We'd love to help!