Step 9 of Building a Better Business: Monitor Your Business Progress Effectively with Key Performance Indicators (KPIs)
Just as you keep a close eye on your dashboard while driving, your business should have its own set of essential metrics to regularly monitor business progress. Creating a business dashboard involves a simple four-step process:
Choose Impactful Key Performance Indicators (KPIs)
Identify three to five KPIs that hold significant influence over your goal achievement. Examples include average hourly rate invoiced, gross margin per job, or average transaction value for a specific period. Focus on KPIs that, when altered, will have the most substantial impact on future results. Find out what exactly a KPI is here.
Streamline KPI Measurement
Automate the measurement process where possible. Utilise accounting software to effortlessly track financial KPIs, ensuring accuracy and efficiency in data collection.
Develop a Concise One-Page Report
Create a simple, one-page report to track and analyse results weekly, fortnightly, or monthly. Dedicate time to review this report regularly and share insights with your team. This step enhances transparency and keeps everyone informed about the business’s progress and performance.
Extend the Process to Your Team
Identify KPIs specific to each team member, distinct from overall business KPIs. These individualised metrics help define a successful day’s work for team members. Regularly monitor and report these KPIs to ensure everyone stays on track ensuring accountability.
As Dick Costolo wisely said, “Successful businesses measure and count things… unsuccessful businesses either measure nothing, the wrong things, too many things, or finally, they measure the right things, but they don’t communicate the measurements efficiently.”
Implement this four-step approach to develop a dynamic business dashboard, empowering both you and your team to make informed decisions, drive continuous improvement and stay on top of your business progress.
