There are many different paths to business success. The paths you take along the journey may vary greatly depending on the type of business you have; for example, if you provide products or services, the industry you are in, your location, target market, etc.
No matter what kind of business you have or plan to have, the foundation should always start with a plan. Part of that plan should include establishing KPIs (Key Performance Indicators), then tracking them from both an activity perspective and an outcome perspective.
What is a KPI? A KPI is typically a quantitative, meaning numerical, measurement of a specific aspect of the process or outcome of your business activity that indicates how well your business is performing according to what you deem to be important; although it can also be a qualitative evaluation.
The most obvious KPIs are revenue and client acquisition, but, those measurements alone won’t give you the full picture, which you need to determine what is working and what needs to be improved in your business. You need to know what you and your staff did or didn’t do that led to that revenue and client acquisition level. When you know, you will be better able to make smart business decisions as to what to continue with or what to change in order to get your desired results.
The most successful businesses in the world, establish a long list of KPIs that give them measurements from all areas of their businesses from operations to human resources, marketing and finance.
You can do it too!
For example, it would be useful to also track your client retention rate, as it takes more energy to gain new clients than it does to retain existing ones. You could also track referrals received, which would also be a measure of how happy your clients are and the strength of your network who may send you referrals to support your business. You could also breakup those KPIs by product or service types, so you know how to spread out your resources.
Even with all of these KPIs, which represent outcomes, it’s still not enough information to help you make the best decisions for your business.
So, if you are not already doing this, I recommend setting a goal for the following qualitative and quantitative items, then measuring them every month or even every day or week to drill down to what you are doing well and where you need to improve.
- Skills or knowledge did you and your staff gain?
- Purchases did you make to help your business?
- Major projects did you or your staff or hired contractors complete?
- Did you do to improve your customer experience?
- Did you:
- Make changes in the human resources aspect of your business?
- Make improvements to your website or SEO?
- Improve your social media marketing practices?
- Pay for ads and what kinds?
- Add in business automation tools to cut down on your manual labour?
- Do more direct outreach like make more phone calls, send personalized emails, etc?
- Attend networking events or join a referral group to start and build new relationships or nurture existing ones?
- Streamline your business process to reduce redundancy, bottlenecks and expenses?
Then, add in the following quantitative and qualitative measurements:
- Number of social media followers
- Number of website visitors
- Conversion rate of website visitors
- Ad performance
- Your performance and staff performance
- Reduced expenses
- Increased speed of product or service delivery
- Feeling less stressed, took more time for yourself
- Improved feedback from customers
I could go into much greater detail with this exercise, but, the above is already a lot to consider, especially if you’ve never set goals, tracked your activity or measured outcomes in detail.
Software programs exist that can help you set and track some of these KPIs, but, not likely all of them. So, you may want to use one of them in combination with a spreadsheet software or just use spreadsheets, like Excel or Google sheets, like I did below.
I’ve only showed you two examples of two categories of KPIs you could track, but, as I’ve listed above, there are many that could be very helpful for your business.
SAMPLE - PART OF A KPI sheet
If you would like help with creating a business plan or setting up a detailed KPI sheet, book a free business coaching consultation with Tammy Defoe. She would be happy to learn about your business and tell you about the business coaching options she offers to help you accomplish these tasks and achieve overall business success.