What can you actually do to improve your business? Should you go out and do more marketing?
One of the ways that you should do regarding to your business is by setting up some standards, the Corporate world refers them as Key Performance Index (“KPI”). They are useful and applicable to the work you have on hand. For example, if you are the CEO of a company, you may set up KPIs for your fellow managers/ supervisors in order to properly oversee your business properly.
Some of the rather good performance index for your business are:
1) Revenue
2) Net Profit
If you are running an online business, here some some of the additional ones you should consider:
1) Leads
2) Conversion Ratio (i.e. Leads to sales)
3) Revenue/ Profit per customer
By having these index, you will be able to have a better picture of your business and measure your performance.
You can’t improve what you can’t measure. By capturing the data of your business (or life), you will have the clarity to measure and improve the things you want for your business and your life.
For professional firms, including attorney, engineering and consulting companies, they would capture the time needed for them to perform their daily tasks. Normally, they would classify their time into 3 categories:
1 ) Chargeable time (time that is actually chargeable to projects or clients)
2) Non-chargeable time (time that is working towards of creating a project or client)
3) Non-productive time (Administrative time that is not productive at all)
By reviewing these time spent on the tasks, the management is able to determine the profitability of the company and make decision as to how to cut lose or better yet improve the business.
In fact, KPIs do not necessarily apply only to business. They can also be applied towards other part of your life. You may even apply KPIs towards your spiritual life. For example, you may check to see if you have performed the following “tasks” to my Christian life:
1) How many bible study classes have I attended this year?
2) How many people have I talked to regarding to my faith this week/ month/ year?
3) How much have I donated to the Church this year?
KPIs can be brutal, as it sheds lights on your performance. You may blind yourself how exceptional your business is, but when you measure your company’s performance against KPIs, then all the blinds will fade away.
In fact, all great leaders would measure their performance in some way
The earlier you face the reality, the sooner you will realize success in your business or in your life.
