Whether you are running a small business or a huge corporation, you can’t rely on your gut feeling to see the kind of progress you have been making. In the business world, it’s important to keep a record of every single thing.
The good news is that there are many proven ways to monitor your overall performance, and KPIs are one of them. Business KPIs or Key Performance Indicators help keep track of all the progress your company has been making. More importantly, they measure whether the company has been able to achieve its goals or not.
Every person and business has their own set of goals to keep them in check and help them achieve their goals. It can’t be done without the help of business metrics because they keep you headed in the direction you want.
Here are a few business KPIs you can start tracking to help you improve your performance;
1. The Number of Sales
It is highly essential to keep track of all your sales on a monthly basis because they give you insight into how well your business is doing. You can monitor every sale you make to find out what product or service people are interested in.
For example, if you’re running a business like carpet cleaning London, you can use the sales you generate each quarter as an indicator of your success. The number of sales you make is very important to check where you stand in the competition and help you take relevant actions to increase the number of your sales.
You can set the following KPIs if you want to measure your success in terms of sales revenue:
- The number of monthly sales,
- The percentage increase in the number of sales to new customers each month,
- Percentage increase in monthly sales, etc
2. Profit and Loss
Every business venture goes through ups and downs, but the only way to get back in the game is by measuring all the profit and loss you are making. Find out how much money is going into your extra expenditures and how much of it is because of the sales you have been making.
When you analyze and process the profit and loss margin, it helps you identify where most of your money has been going and whether you’re making enough of what you put in. It can help deal with issues that have a negative impact on your business.
You can track the following KPIs:
- Quarterly profits
- The quarterly cost of running your business
- The amount of profit and loss you’re making after excluding the expenses per month
3. Annual Sales Growth
We all keep your monthly progress in check, but if you want to track your growth as a business, you need to calculate annual sales growth. Most of the businesses depend on different seasons, so your annual progress will help you find out when you find out the months in which your business was flourishing.
For example, some businesses suffer a huge loss in winters, and keeping annual growth in check will help them pinpoint the exact months so they can come up with strategies.
- Track your sales growth during a specific time period and compare it with the previous times you have had.
4. Inventory
Every business has an inventory where you keep a check of all the products you bought and how much you sold. Tracking your inventory gross will tell you which product got sold out fast and which product didn’t get sold.
You can make necessary adjustments using this and offer special discounts on the products that didn’t make it through, so everything is in balance.
Track your:
- Stock to sales ratio
- Liquidity ratio
- The rate at which you stock up the products customers demand the most
5. Accounts Payable Rate
Every business has its different suppliers and manufacturers that help run the industry. It’s important to keep a record of all the money you spend on your suppliers. You can measure the accounts payable rate to find out how many transactions you have made and how much you pay your manufacturers. You can start by monitoring the following:
- The quarterly overhead costs, including suppliers and staff
- The costs per transaction in one month
6. Number of Consumer Complaints
The number of consumer complaints is another important KPI because it helps you identify problems that your consumers are facing so you can fix them. It is important to receive feedback and act accordingly. Resolving any consumer complaints helps form a good relationship with them, so they keep adding up to your company’s growth.
For example, you can track:
- The number of complaints in one quarter
- The number of complaints resolved in one quarter
7. Market Share
Market share is another indicator of success; the more market share you occupy, the larger your revenue is going to be. Tracking your market share will tell you your place in the competition. You can compare your business’s growth with the fellow business ventures to find out what steps you should take to boost your performance.
Market share KPIs include:
- The percentage share of sales in the market
- The number of products being sold each quarter as compared to competitor’s
8. Customer Satisfaction
Your company depends on your customers and clients, so customer satisfaction should be one of your top priorities if you don’t’ want your competitor to succeed and take your customers from you.
With today’s technology, you can provide users feedback and online review forms to track all the improvements you need in your business. Customer feedback can help you in the long run, and you can track it by monitoring:
- Customer satisfaction score
- Employee response time and the positive impact on the customers
9. Online Traffic
We’re living in a global village, so an online and social media presence is important if you want to promote your product and services. You can track how much traffic your business website got and how many times people engaged with your social media posts.
It helps measure your popularity among the users and what strategies you can use to increase the number of your audience.
Track the following:
- Website visits in a quarter
- Weekly post engagements on social media
10. Revenue Growth Rate
Every business has its own goals, and measuring revenue growth rate gives you an idea of what speed your business is growing. You can calculate your company’s income, sales, profit, and gross margins and determine if your overall performance is decreasing or increasing.
Financial KPIs are of the most important business performance indicators because you keep a record of everything, and you can find out the gaps. Track it using:
- The number of sales you have made during a specific amount of time
- The net profit in a quarter
Takeaway – Track Your Progress through KPIs for Continued Growth
There are a lot of business KPIs you can track depending upon the type of business you are running, but these basic ones will give you a general idea and direction in which you are headed. After tracking all these KPIs, you can take the necessary steps and strategies to overcome any deficiencies in your growth.
When you set goals for yourself, you need a system to monitor all the progress you have made over time. Tracking KPIs is a reliable way of finding out if your goals are being achieved or not. Moreover, it’s important to keep a record of every financial move you make to avoid any future problems.
Author Bio:
Shaheryar provides ghostwriting and copywriting services. His educational background in the technical field and business studies helps him in tackling topics ranging from career and business productivity to web development and digital marketing. He occasionally writes articles for Carpet Cleaning London.