Key performance indicators (KPIs) are essential tools when it comes to business – they allow business owners and managers to measure how well they’re doing and what progress they’re making towards their goals. Whether you’re a small startup or a large corporation, KPIs play a vital part in keeping you on track and ensuring your business grows and thrives in the way you’ve planned it to. Read on to find out more about exactly why KPIs are important, and you might find you need to put some in place.
Setting Your Objectives
KPIs begin with setting clear objectives for your business, and these objectives have to be SMART (which means they’re specific, measurable, achievable, relevant, and timely). When you define what you want to achieve with your KPIs, you’ll have a much better idea of what to do within your business.
This is useful for a number of reasons. Firstly, it means you’ll be able to make decisions much more easily because you’ll always know where you want to take the business next. Plus, your team will be much more clear on what they’re meant to be doing, and they’ll feel more like a part of the business if they’re let in on the objectives you’re created. Finally, when you have goals in place, you’ll be able to write your business place, which is crucial if you want to access funding or find investors at some point.
KPIs mean you can ensure your goals are the right ones and that you’re hitting each one when you’re meant to be. If you see that you’re not, you can make changes to ensure you start to do things in a more successful way.
The great thing about KPIs is that they’re the ideal tool to help you measure your business’s performance accurately. They’ll give you real facts and figures to work with, allowing you to track and gauge how well you’re meeting your goals (as mentioned above).
If you don’t have KPIs in place, it’s going to be difficult, if not entirely impossible, to measure how well you’re doing and whether things are going well. Remember that it can sometimes feel as though things are going badly when they’re actually not, and vice versa. Unless you know the truth, you might start to make decisions and changes you don’t need to, and that could be a disaster. Your KPIs need to be sensible, of course, and must include things like keeping track of outsourced projects as well as elements within your business, otherwise the results will be skewed.
Identify Strengths And Weaknesses
Every business is going to have strengths and weaknesses – nothing is perfect, after all. Knowing what those strengths and weaknesses are can be beneficial for business owners, as they’ll know what areas they need to work on and which ones can help them stand out and even be a USP because it’s something they’re particularly good at.
KPIs regarding your strengths and weaknesses can help you because you’ll instantly see where you’re hitting your targets (and exceeding them when it comes to the things you’re especially good at) and where you’re not (which will be the areas you’re not so good at). Once you have the information, you can choose to outsource, train more team members, or perhaps get more knowledge yourself to become better at those areas you’re not succeeding in right now.