If you want to grow your business, you probably know how difficult it is to focus your efforts on the right things.
It becomes even more difficult when you aren’t even sure what those right things are!
Luckily there is this little thing called a Key Performance Indicator, or KPI.
Investopedia defines a KPI as – a set of quantifiable measures that a company uses to gauge its performance over time. These metrics are used to determine a company’s progress in achieving its strategic and operational goals, and also to compare a company’s finances and performance against other businesses within its industry.
So now that we know what KPIs are, how do we find them?
Finding Your KPIs
Finding KPIs can seem like a long process if you don’t know how to look for one.
People often confuse a KPI with business metrics, and while they are in the same vein, KPIs are geared toward critical business objectives, not simple data metrics.
So when you are looking for your KPIs, follow these questions.
- What is your desired outcome?
- Why does this outcome matter?
- How are you going to measure progress?
- How can you influence the outcome?
- Who is responsible for the business outcome?
- How will you know you’ve achieved your outcome?
- How often will you review progress towards the outcome?
Now that we have taken the first steps to finding your KPIs, let’s discuss what to do with that information.
The Value of KPIs
Tracking your KPIs alone will not be valuable.
The true value comes from what you do with the information it tells you. It is only as valuable as the action it inspires.
If you are able to see your data in real time, it will allow you to respond and improve upon your strongest areas.
But even further than that, tracking your KPIs has intrinsic value as well. For example, it can encourage accountability, help everyone understand the common goal, and define success for the team.
Interested in learning more about how Kahuna Accounting can help you grow your business? Schedule a strategy call with Kahuna Accounting and we can discuss best practices for bookkeeping, profit, and growth!Schedule Discovery Meeting