Examples of Small Business KPIs and How to Develop Yours
The number of KPI’s you monitor should be limited to those that will make the most powerful difference to your business, and these should align with your business plan. The better you understand your business, the easier it will be to increase your profits and free up cash flow.
Establish what the key drivers are in your business. These may be:
- financial (e.g. gross profit margin or average annual customer spend), or
- non-financial (e.g. customer satisfaction ratings).
Identifying which levers in your business need to be tweaked to get on your path for success.
Examples of Small Business Key Performance Indicators (KPIs)
If your goal is to reduce overall debt within your business, you need more cash in the business to direct towards the debt.
So, we look at the top line revenue of the business, set some monthly revenue targets and track the performance against the forecast budget amounts.
Another example might be that your debtor days are blowing out beyond your credit terms and you want to speed up the time it takes for clients to pay you.
The KPI will be to meet standard credit terms (7 days, 14 days or 30 days) so you'd implement strategies to improve credit control and payment processing. E.g. reminders and follow up processes.
Any time is the right time to start working on your KPI’s. It’s easy to put this in the too hard basket but investing a little time each week could pay big dividends, improving both your business and personal life.
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An easy-to-use toolkit for small business owners who want to plan, track, and measure their goals and grow their business.