Streamline Office Efficiency – Review Your KPIs!
It’s always helpful to look at your business with an eagle-eye view, and the new year is a particularly good time to do it! Reviewing your business as a whole shows you where you’re on track, and where you need to spend some time improving. But what do you look at? What metrics do you use to compare this year to last year?
Assess Your Business
Key Performance Indices (or KPIs) are the quantifiable data that tell you how you’re performing in each area of your business. The numbers will be unique to your business, and the goal of using KPIs is to look for patterns through consistent measuring. So, what are the basic KPIs?
- Financial: How much money are you making? How much are you spending?
- Marketing: How many people know about your products or services?
- Sales: How many people are buying from you? How many of the people you’re marketing to are actually making purchases?
- HR: Do you have the right number of employees? Do you have the right people in each position?
- Inventory: Do you have enough inventory to fill orders? Do you have an excess of inventory?
Use your KPIs
Answer each of these questions about your business, and then put those numbers to work! You can draw actionable conclusions from KPIs.
If you’re spending a lot of money on marketing to get more leads, but those leads aren’t buying from you, is that marketing worth it? Conversely, if you make a sale with every new lead, but you’re receiving so few leads that the resulting sales won’t cover your expenses, you may need to expand your marketing efforts to find new customers.
You have to know where to focus your energies to improve in the right direction, and tracking your KPIs will give you the information you need! Check in on your KPIs regularly, whether that’s once a week or once a month. As you continue to gather data, you’ll be able to draw stronger conclusions and point your business in the right direction!
Thanks for this. I just learned the term KPIs last week and I’m excited to put some in place for my business, even after 13 years!
Yay, I’m excited for you!
These are excellent questions and directions to go in. It’s great to gather data at any point, but even more interesting to look back over the year that was so you can better plan the coming year.
Often you have a ‘gut sense’ about how things are going or the results you are getting. When you back that up with actual data, it’s a powerful combination.
Last year I tried a new measurement tool for the goals I had set. When I compared what I thought to the actual data/results of the numbers, I discovered two things. One, my gut was right. Two, from the data, I learned exactly where I needed to make changes.
Thank you for the reminder about the power of KPIs.
KPIs are definitely important metrics for many (small) businesses, though I’m not sure they’re all equally measurable. For marketing, for example, “How many people know about your products or services?” you can measure how many people are subscribing to your newsletter or following you on social media, and you can track the metrics for visitors who come to your web site, but this may not always be the most useful measurement if you’re a funeral home or marriage counselor or language tutor, where people don’t need you until they *really* need you. Knowing the rules, though, allows you to magnify your opportunities so you can take advantage of them when they arrive. Great points.
For sure, Julie! It’s going to be unique to each business.