In your business, you’re undoubtedly working to achieve certain organisational goals.
For instance, you may wish to attract clients, cut down on stock wastage, or increase the money you earn from repeat clients.
Whatever your goals may be, if you want them to be effective, then they’ll need to be measurable – and that’s where Key Performance Indicator’s or Small Business KPIs come in.
What are Small Business KPIs?
A Key Performance Indicator or KPI allows you to define and measure your success or progress in achieving a business goal. Effective small business KPIs are always key to your success, and they are often long-term goals. They can also help you to make decisions based on numbers and facts, rather than simple gut feeling and guesses.
How They Work
The first step in defining your small business KPIs is to determine what your business’s goals are. You may wish to pick a challenge your business faces, or an area in the business that you would like to improve. If your KPIs are financial, your bookkeeper can help you frame appropriate ones to improve your business’s profitability, or reduce inefficiency.
Next, you need to frame your goals in a measurable way. For instance, “get more sales leads” is too broad. However, “increase sales leads by 10% over the next year” is much more precise.
You can then use your KPIs to both drive your business direction, measure your success in achieving goals, and manage your employees’ performance. By ensuring your workforce are well aware of your KPIs – by talking about them regularly, sharing targets and progress, and providing other reminders – you can keep your business on track to reach your goals.
KPIs can also be broken down from an organisational level, to a departmental level, and to an individual employee level. You may also be able to add bonus programs for employees that reach their KPIs, or link your KPIs to contractor remuneration.
Achieve Your Goals
Do you want to ensure your business is on track to achieving your goals? An EzyAccounts bookkeeper can help you implement appropriate small business KPIs to help you measure your success. Call us today on 1300 313 397 for a complimentary discussion about how KPIs can help your business.
Examples of KPIs
Every business can use KPIs. Below are examples of different KPIs for different industries.
• Manufacturing – production KPIs could be set with an aim of improving the percentage of products that are manufactured without faults
• Construction – KPIs could focus on reducing the number of hours spent during certain stages of a project
• Real Estate – sales KPIs can ensure that agents make money when the business makes money, and that they meet minimum sales targets.
• Service Industry – KPIs could include increasing the number of repeat clients
Your EzyAccounts bookkeeper can help you design the right KPIs for your business. To learn more, call us today on 1300 313 397.
In addition to designing and measuring appropriate small business KPIs, our local bookkeepers are qualified to help you with a range of bookkeeping tasks, including outsourced financial controlling, budgeting, payroll management, and cash flow forecasting.
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