Define your KPIs for a Strong 2019
Have you defined your priorities for 2019? Similar to personal resolutions, business resolutions can help you decide what you need to change to better achieve your goals. As you reflect on what you want to do differently in your business this year, think about how you can incorporate data and Key Performance Indicators (KPIs) into your annual goals for the upcoming year.
Why do you need to define your KPIs?
With so much going on, business owners often feel overwhelmed and distracted with day-to-day activities and tasks. By defining five to seven measurements that act as business drivers, measuring progress is simplified. KPIs help to keep your strategic priorities top-of-mind, and equip you with the important data you need to make important decisions quickly.
The profitability of your business depends on how well your employees consistently perform critical activities. What gets measured gets done, and what gets rewarded gets done again! Employees perform best when they understand how their performance affects the bottom line and how their performance is measured. Defining your annual goals through KPIs can provide you with a way to align team members on strategic issues and assign accountability.
How KPIs can transform your business in 2019
By making use of KPIs, you reap a whole new set of benefits and gains that you can’t have under a reactive goal system.
- You gain complete mastery over your finances
KPIs commonly include goals like average dollars per sale, profit margins, and the number of times clients buy from you. Being able to increase these metrics requires you to understand the full nature of your cash flow and product margins, as well as have a fleshed out balance sheet and income statement. Your future actions will be tied back to these indicators, which in turn will keep you completely informed as to what is going on at any point of the day, week, month, or year.
- You become more receptive to your customers
Another common KPI is a satisfaction index – how much did customers enjoy doing business with you, and how much did they like what you were selling? Turning one-time customers into repeat customers is one of the most powerful goals you can set. Your sales will increase, you will hire additional people, customer satisfaction goes up, and your overall profits will go up by an appreciable amount. Increasing your other KPIs forces you to tune into what your customers really want, and that could mean the difference between failure and success.
- Your team will move with you
Think of a wave at a beach. Do all the individual water molecules move whichever way they please? Of course not. The waves that you see on a beach occur because the water moves in cohesion, not disorganized chaos. Your team’s flow works much the same way. Without a clear set of directions and goals, your team will not be able to contribute value to the business, and you won’t enjoy the benefits of a productive team. Productivity is another common KPI, but meeting the goal that you set for it requires you to meet the goals for your other KPIs.
Small changes in critical areas can have a great impact on your bottom line. When you create KPIs, you set a challenge for your team – and that includes you. You set the course of your ship, and your employees will respond accordingly. If there are no plans and goals, there is no direction. Having KPIs
What is the game plan for your business in 2019? If you have any questions or need help creating your annual plan and defining your KPIs, contact us today!