What you measure is what you master. In this video, I want to outline 4 factors for choosing KPIs to master the efficiency, growth, and health of your business.
Hi, I’m Marcus Mire, founder of MireGroup CPAs and the Total Control accounting system designed to help businesses profit through clarity and control in their accounting.
Keeping a close eye on key performance indicators can not only help you make smarter business decisions but when crafted well they can be a catalyst for big growth.
Let’s dive into 4 elements of a KPI that gets results.
1. Relevant
The best metrics are those that have the most impact. For example, top-line revenue may certainly be relevant to managers and sales but may not be important to the customer service staff. Maybe tracking repeat sales or referrals would be more relevant to the impact they have on your business. Make sure employees are seeing reports of numbers they can influence.
2. Balanced
Measure short and long-term KPIs. Similar to being relevant, be mindful of the window of time you are tracking and reporting. Year over year comparisons can offer more context to the performance. KPI’s are often a good way to measure smaller steps toward a larger goal.
3. Understandable
Everyone following it should know what the KPI means. Don’t assume your staff knows what they are looking for in your charts or graphs. Make sure they know what results are good, better, and best.
4. Shared
Everyone in the business should know why it’s important and see it often. Performance indicators lose their power when they aren’t shared regularly with the right people. Having them on the agenda of your routine meetings offers consistent accountability that moves companies to positive growth.
Integrating smart KPI’s into your business is only one piece of a larger roadmap we’ve designed to bring businesses more time and profits through clarity and control in their accounting. Go to our website and download the free guide along with the self-assessment that shows you where to start.
Tyler Woerner: Mar 25, 2024 9:28:56 AM