It doesn’t matter if you’re a recently launched startup or an established industry leader, every business needs a framework to track their progress. For most businesses, these come in the form of Key Performance Indicators (KPIs).
Below are a few KPIs that will help you create a successful and sustainable business.
Profit vs. Loss
One of the best KPIs for gauging the success and viability of your business is the relationship between your profit and loss.
As a KPI, your business’ profit versus loss margin should be analysed on a regular basis. It will provide you with a good understanding of your business’ performance, particularly in these areas:
For most small businesses, cash is generally quite tight. So having a good handle on your available cash is highly recommended. This will show you if it’s time to tighten the belt or if you have extra cash, which can be reinvested.
Secondly, it will provide you with a good understanding of the business’ sales cycle. This will help you plan for any yearly fluctuations.
A close analysis of the profit and loss margin will help evaluate the growth of the business and project for future growth.
Your invoicing procedures
Your business’ ability to invoice accurately and receive payments in a timely manner will have a big impact on the viability of the business. Thus, these systems need to be constantly evaluated.
Many small businesses may struggle to keep track of their invoices. Having a clean invoicing process will help you see which accounts are up-to-date, what’s outstanding and who you need to follow up with.
Poor management of your invoices could also cause a lot of trouble around tax time. If your invoicing procedures are mishandled throughout the year it can be very time-consuming and costly when you need to get everything in order.
Accounting software, such as CashManager, is an easy and effective way of sending and tracking your business’ invoices. Which will help you easily stay on top of your cash flow, plus it will keep your accountant happy around tax time.
Income by customer
Make sure you have a handle on who your key customers are. Understanding who your target market is will allow you to tailor your communications to that audience. Ideally, leading to a more profitable relationship and further long-term success.
Happy customers buy more and unhappy customers take their business elsewhere, it’s that simple. That’s why customer satisfaction should constantly be tracked and monitored.
The best way to gauge customer satisfaction is too simply ask. Seek constructive feedback, ask your customers how they feel about your offering and ask what they think needs improvement.
This will not only help you get a better understanding of what your customers actually think about your offerings but will also help to strengthen your relationship with them.
Staying on top of your website's traffic is just as important as generating that traffic.
It’s all well and good getting people to your site but understanding what those people are doing while on your site is all the more valuable. Analysing variables such as visitor numbers, time on page and pages visited will give you a good picture of what people are looking for.
From there, you will be able to adapt your content and layout to optimise this traffic. With more and more people choosing to engage with company websites before using their services, having a website that funnels traffic from a visitor to a lead, is vital.
In today’s landscape, customers are interacting with businesses through their social channels more than ever. Thus, keeping on top of those channels is vital.
Commonly used social media channels, such as Facebook and LinkedIn, offer means for businesses to track visitor numbers and engagement. With the help of these analytics, businesses are able to adapt their social media presence to encourage more interaction with potential customers.
In order for your business to succeed, it’s important you have KPIs that will give you a precise picture of your business. These KPIs should constantly be used to analyse the health and viability of your business and be used to plan for the future.
CashManager provides accounting software that can help you stay on top of your KPIs. If you would like to see how our software can help your business, click here.