For your business to grow and thrive, you should be able to monitor different key aspects. When you are starting, different aspects will need to be tracked, and if you are not keen, you might miss out on some key areas. This is where key performance indicators come into play. Tow trucks in Albany have mastered the art of monitoring key KPIs that are critical for the success of their business. But before we can dive deeper into these KPIs, let’s have an understanding of what KPIs are.
What are KPIs
KPIs are measurable indicators that show the health of a business and progress one makes towards achieving certain goals. Setting KPIs for your business can help in keeping you on track and letting you know if your efforts are paying out. KPIs will also help you in determining if things are working out for your business so that you can correct all issues that are not going according to plan. Different issues come into play when choosing the right KPIs for small businesses. There is no complete list of KPIs that every business should track. However, there is a handful that is very important to track.
Think about your business objectives
Business owners normally put a focus on the bottom line. It is very important to know where a business is going and also understand the health of your business in terms of profits. Good KPIs will help you measure only what is important for your business. You need to think about the different goals you have for your business. You might have a goal of increasing the number of your clients and revamping your revenue. Set KPIs to determine where you stand in terms of achieving these goals.
Consider the stage of your business
Different KPIs will make sense at different stages of a business. A relatively new company that is trying to make its name out there will mostly set KPIs focused on sales. It should set metrics to determine how quickly they can turn a receivable into cash. A more established company would probably want to put more focus on employee retention and on factors that focus on business growth and continuity.
There are a couple of KPIs every business should be able to track. The first one is net profit. A business that doesn’t understand if it’s profitable or not will not stand the heat in the market. Small businesses need to track their net profits over time. Evaluate if your business is getting more or less profitable each year. Net profit is simply total revenue fewer expenses.
Any business that wants to last must also be able to determine its customer acquisition cost. You should know how much it costs to get a new customer or client. In the early stages of a business, you might not be so much worried about how much it costs to get a sale. However, as your business grows, this will be a very important KPI to track. You need to determine how much you spend to get a new customer. If you send $100 on marketing and you only get 10 customers, then your customer acquisition cost is $10 per customer.