Most entrepreneurs spend a lot of time in operational activities. Both external and internal situations in business consume a good part of his limited time. Rarely can he afford the time to sit back and review his business.
But that’s crucial. Because you need differentiate between those urgent and important things. Reviewing your progress is critical. It lets you know if you are going the right path.
And with limited time on hand, it’s very important that one define those key metrics which helps one know if the business is on the right track.
Business is all about numbers and if you don’t track your numbers you will very soon find yourself overwhelmed and out of control.
It’s most important to define key metrics and keep track of it all the time. Because that can help you predict the future with some certainty
Defining the key metrics is important. Yes if you a product or service company revenue is the most important metric, but there are far important metrics which needs to be tracked to give you a sense of how the business is performing. It can be argued that Profit before tax is a more important metric than revenue; because you can be growing in revenues but if you are bleeding then what’s the point.
In my business we have KPI for all departments.
Here are some key metrics we track for our organization. The important thing
- Gross Margins
- No. of Clients Meeting
- No. of Enquiries
- % Business from Existing Clients
- On Time Deliveries
- Client Satisfaction Score.
Ideally you should have 1-2 big metric which you want to track closely which define your progress and series of smaller metrics which are nothing but lead indicators
When you reduce your business to some key metrics it really help you keep a tab on where your business is heading and helps you course correct if there is any deviation.