Businesses of all sizes must set goals and monitor their performance. It’s especially crucial for companies in their early stages of life.
Examining your daily sales isn’t enough to tell if you are on the right track to your long-term business goals. Business owners must choose and track key performance indicators, called KPIs.
Below, we’ll discuss KPIs and how you can use them to grow your business.
What are KPIs? Key performance indicators are just how they sound--a selection of results you monitor to determine how well you’re doing. They exist outside of business, too. We use them in everyday life, such as measuring health indicators like weight, blood pressure, and heart rate.
Think of business KPIs just like lifestyle KPIs–you set a goal and track and measure how well you do every so often. In improving your company’s overall health and well-being, picking appropriate goals is vital because “what gets measured gets managed.”
What are you hoping to manage and achieve? Let’s look at choosing KPIs.
No two companies are the same. Your suitable KPIs won’t look like your closest competitors.
Choosing appropriate KPIs can be challenging. The first step towards wise selection is determining your long-term business goals. More market share or 10% more profits versus more social media interactions or brand recognition by the end of the year require different approaches and metrics–quantifiable data versus qualitative analysis.
You’ll likely track more than one goal (don’t pick too many, though) using various KPIs. Discuss your goals with your Charlotte, NC CPA advisors to select what’s best to focus on now versus in the future and what KPIs to track.
Keeping track of quantitative data for KPIs requires organization and planning. It always helps to partner with a CPA firm that can help you with business strategy consulting services when your objectives and KPIs relate to money goals.
Expert accountants can assist you with checking on your month-over-month cash flow, expenses, and profits. These regular check-ups keep you updated on vital data to determine what adjustments you can make to meet your business and finance goals.
Qualitative KPIs might require a client advisory, marketing, or customer success team. Examples of these goals include improving your brand reputation, word-of-mouth referrals, or social media presence. In these instances, your client base is the most important source of information, and you’ll likely need help capturing feedback from them. Focus groups or surveys can help you gather data on your target audience’s general sentiment toward your business.
Can you imagine getting your work crew together for a game of basketball without the hoop and net? Working without goals would be very similar. Setting and tracking goals provides you and your employees with measurable values that exhibit how well you all are achieving the key business objectives you set for yourselves.
KPIs give you a starting value against which to compare yourself in the future. Checking your current status helps you discover whether or not you are moving towards your goals. Company- or department-wide KPIs give you and your team clear and straightforward goals to work towards. Additionally, it helps you develop strategies to reach those goals and ways to evaluate your performance as you go.
What’s more, KPIs:
As a business owner, you’re likely no stranger to goal-setting. Working with your business accountant on specific and measurable goals and KPIs keeps you pointed and moving in the right direction.
Additionally, KPIs help you pair down business ideas and goals to a few of the biggest needle movers. It’s easy to get in a rut of adding objectives to your mental or physical to-do list. Before you know it, you're swimming in a dizzying whirlpool of ideas but going nowhere.
KPIs set you on a straight pathway, forcing you to take the time to put good strategies and performance indicators in place. They help you move closer to your goals while tracking your results.
Work with a trusted business strategy partner or CPA firm to help you narrow down and focus on a few essential business goals at a time. They can also help you recognize and realize what KPIs to track and help you integrate the appropriate monitoring and measurement tools into your business.