Common KPI’s can include everything from site views to customer satisfaction to number of bookings or monthly recurring revenue. All of these can provide valuable information about the viability of your business and the reasonableness of your goals, but not every KPI will apply to every business. In order to get the information you need for your SME, you’ll want to choose the most relevant KPI’s to focus on.
So how do you go about choosing the right KPI’s for your business? There are several things to keep in mind when determining exactly which KPI’s will work for you. You’ll want to start off by having a set goal in mind for your business. Then you can choose the specific KPI’s that will help you determine if you are having success in reaching that goal.
Also, you’ll want to keep in mind where your company stands in terms of growth. Businesses that are just starting out will have different goals than those that are already established and wanting to maintain a steady flow of business or perhaps spark renewed interest. There are different types of KPI’s that apply in different circumstances and you’ll want to choose accordingly.
KPI’s can also vary from one industry to another, so you’ll want to pay close attention to those for your particular industry, but remember that within those industry standards you’ll want to choose performance indicators that are specific to your own business. Don’t just assume that what works for one company in your industry will work for all of them.
Another important thing to remember when choosing KPI’s is to limit them as much as possible. The more performance indicators you focus on the more you complicate matters. It’s better to stick with between four and ten KPI’s so that you can get a clearer picture of how your business is doing. Remember the purpose of these indicators is to provide a gauge of how well you’re doing. It can be hard to see the forest for the trees if you look too far and wide.
You also want to look at both lagging and leading indicators, as this gives you an idea of both how you’ve already done and how you are likely to do in the future. Seeing only one part of the picture will make it more difficult for you to make any solid determinations about your company’s progress. And having business goals won’t do you much good if you can’t figure out whether you’re achieving them, will it?
As the owner of an SME it is imperative that you stay on top of your business expectations at all time. Having a trained business coach to assist you in choosing the most appropriate KPI’s can help you to do just that. Don’t lose track of your businesses future; learn how to make use of performance indicators and you’ll be achieving your goals in no time.