KPI’s are key performance indicators – the important ways you measure how well your business is going. You might be surprised at how many different types of KPI’s can apply in various industries, including the obvious ones, like:
- Number of new customers
- Available cash
There are also customer-specific KPI’s:
- Customer lifetime value
- Customer acquisition cost
- Customer retention
- Customer satisfaction
There are KPI’s for your employees:
- Employee turnover rate
- Employee satisfaction
- Employee productivity
And KPI’s that might relate to your processes:
- Returns, complaints or faulty goods
- Conversion rate for queries into sales
- Efficiency measures
In addition to all these metrics, your industry or business might have its own specific targets and ways of measuring success. If this all sounds confusing, it certainly can be, and very few Kiwi small business owners have a solid grasp on how to develop and use KPI’s successfully. The good news is that the size of your business doesn’t determine the number of KPI’s that are required to efficiently run it. There may just be one or two measurements that will help you keep a handle on how your company is performing every week, and the monitoring of these will assist your company to grow and increase profits.
But even choosing one or two KPI’s can be tricky, because you’ve got to pick the right ones and know what to look for once you’re getting the data. To help you set KPI’s for your business and develop realistic targets, you may find you need some help. A virtual CFO can step in and look at your business to help you identify, measure and establish key performance indicators that will quickly demonstrate your company’s performance.
A great virtual CFO can meet up with you to talk to you about what success looks like in your business and how to quantify that success. Then you’ll know when the company is heading off course and rapidly be able to correct its direction.
Your virtual CFO can also work out what you’re learning from all your data. Many companies have tools to gather masses of data, only to have it sitting unread and unused, month after month. A virtual CFO can take that data and sift through it to pull out the trends and information you need to help your business grow and thrive.
Don’t struggle through mountains of numbers on your own trying to figure out what you need to measure and what your targets should be. A virtual CFO can help you solve those problems in just a few short meetings. Give us a call and find out how a virtual CFO can help you guide your business toward success and prosperity.