Keep Your Business on Track with KPI’s
At the thebestof Bromsgrove meeting this week (chaired by Tim Mayneord of Bromsgrove Creative and held at The Greyhound Inn) members discussed the importance of KPI’s in business.
A few members had no idea what KPI’s were, and truth be told, up until a few weeks ago, I didn’t have a clue either.
I decided to write this week’s blog for thebestof Stourbridge to help ensure that Stourbridge business owners know exactly what KPI’s are, how they can be used and measured and why they are so important to the success of your business.
What are KPI’s?
KPI’s are Key Performance Indicators. This broad term probably doesn’t make any more sense than the acronym, so allow me to be a little more detailed.
KPI’s are factors in your business that can be identified, tested, measured and reviewed. KPI’s can be based on a number of different aspects of your business, from financials, to marketing, to attendance, to leads, quotes and conversions.
Essentially, KPI is the fancy phrase to describe the process of setting a goal and measuring your business’s ability to meet or even exceed a goal. By measuring your KPI’s you can be confident as to whether or not your business is on target to meet it’s goals.
How to Use KPI’s to Keep Your Business on Track
Andy Gwynn of thebestof Droitwich and Worcester gave some great advice on KPI’s at the meeting.
Andy said there were three steps to KPI’s:
1) Create your KPI’s – What would you like to test and measure? Perhaps it’s your sales, or the average profit made on each order? Perhaps it’s the number of calls your sales team make? Maybe you need to test and measure how well your marketing strategies are working?
The key to creating your own KPI’s is to decide what factors and information will truly reflect the progress and success of your business.
2) Review and Report – There’s no point setting and measuring KPI’s if you honestly don’t intend to review them on a weekly and monthly basis. To quote Andy Gwynn; “If you don’t review your KPI’s you may as well not have them!”
Take an hour each week week to go through your KPI’s to see if your business is on track with it’s goals.
3) Do Things Differently – Occasionally, your KPI’s will reveal that your business is not keeping true to the course of success you had planned. Don’t panic! Instead, rethink your current strategy and consider what you could be doing differently to get your business back on track.
If you’re not sure how you could be doing things differently, speak to your team. Alternatively, why not give your thebestof advisor a call to discuss what you could be doing differently to make your business successful.
“If you don’t measure it, you can’t manage it!” – Andy Gwynn
Start off Simple and Start to Measure your Success
The key to KPI’s is to start off simple.
Firstly, think about the things that really matter to your business. For different businesses, this will mean different things.
Paul Rhodes from 22 Blue has only been in business for the last 2 years, but he gave some great advice on how to use KPI’s.
Paul advised starting off very simple with KPI’s. Rather than trying to measure absolutely everything, he recommended instead choosing around four or five KPI’s that meant the most to your business. He added that a business owner can always add more KPI’s later down the line, once they are comfortable with the process described above.
Think of the Dashboard of Your Car
Another analogy provided by Andy Gwynn was that of a car dashboard.
With the rev counter, the fuel light, the check engine light and other little reminders immediately visible, we are able to quickly and easily maintain our vehicles.
KPI’s are the dashboard to your business vehicle. They are the means by which to ensure that your business is on track and heading in the right direction. Without KPI’s, how can you know whether or not your vehicle (or business) needs maintenance, or fuel? Without these key measurements, how can you know whether your business is on track to reach it’s destination in the planned journey time?
Blue Fusion Studios Ltd is a Bromsgrove web design and development business that is currently working on a web application in collaboration with Nathan Littleton from Future Visions that helps you to set and measure your KPI’s. The application is due to be launched in 2012.
You can find out more useful business insight from the blogger, Hannah Smith of Blue Fusion Studios, by following me on my social media platforms!
Tweet me directly at @HannahBFS or at @bfsdesign. Alternatively you can reach us on FaceBook.
