What are KPIs?
Key Performance Indicators (KPIs) are metrics that provide a quantitative measurements of your company’s performance over time. They should act as a “flash” report, giving you a quick understanding of how your business is progressing, or can be expected to perform in the near future.
Why are KPIs important?
There are many reasons why KPIs are important. However, there are no standard key performance indicators to measure company performance. By setting measurable company goals, you can effectively use key performance indicators to help grow your business strategically.
Breaking it down:
Key: Of fundamental important in gaining a competitive advantage or a make or break component to business success
Performance: Measurable, quantified and easily influenced by individual behaviours
Indicator: Leading information on future performance
The best KPIs provide a high-level snapshot of success for the business, and are rooted in the vision of the organisation. They are well-defined and measurable, and are tied to key business processes and operational activity that supports the company’s overall goals.
A good example of a KPI for increasing revenue might look like this:
• Annual Sales Goal: £2,000,000
• Average sale/number of sales: £4000/500 sales per week/day: 10/2
• Close rate: 50%
• Appointments per day: 4
• Cold calls per appointment: 5
• KPI: 20 cold calls per day
This white paper will:
- Define key performance indicators in more detail & discuss why they are important
- Help you determine your Business’s KPIs
- Set guidelines for what KPIs you should track based on your company’s goals
At TAB, our business coaching sessions and advisory boards help business owners with their strategic business planning including setting and using KPIs.
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