10 KPIs to Follow if you Own a Small Business
If you are wondering what a KPI is, it’s basically what you should pay attention to if you want your business to flourish. The acronym stands for Key Performance Indicators, and as you can tell by the name, they are the factors you need to take into account while managing your business to make sure everything goes smoothly and that preventable mistakes aren’t allowed to happen.
Here are a selection of ten of those KPIs you need to stay on top of:
1. Revenue Growth Rates
Revenue and growth rate can be an important exercise in benchmarking. Revenue tracking gives a great key performance indicator on the success of your decisions, how well your employees are working, or if you are innovating to keep up with the changing needs of your customers. If you follow the numbers closely and categorize them, you can compare to the prior year and identify trends and changes.
2. Repeat Business
It’s important to know how many people are coming back and buying again. This intent and interest should be tied to other strategies and tactics so that you can identify and work with what seems to be the motivation here. This way you can better determine how to market to those who might be interested in making more purchases.
Instead of focusing solely on revenue, it’s important to also consider these two things: the value proposition of your product or service? Not only that but how valuable are the people running your company? How valuable is their insight, knowledge, work ethic, etc. These two aspects have to work together to guarantee the success of your business.
For 90 percent of businesses out there, profitability should probably be the most important KPI. A lot of businesses get caught up in revenue, which can be considered a bit of a vanity metric. It is possible for companies to fail while having substantial revenue growth.
5. Client Satisfaction
Client satisfaction can make or break a company. When your clients are unhappy, chances are they will look for better options, which, to your business, will mean a loss in revenue. By focusing your efforts toward maintaining or improving client satisfaction, you are in a better position to increase prices or come up with new offerings.
6. Employee Happiness
If you don’t take care of the people who work for you, they won’t bother to make sure that the company is turning a profit. You want to make sure that the company is making money and the people in your business are the ones that make that happen. Keep them happy and motivated. Less stress means more productivity and better ideas and solutions.
7. Month-Over-Month Growth
Whether it’s new users or new revenue, tracking month-over-month growth will give you a clear understanding of how your time is spent each month, and whether your business is moving forward or not. It’s important to track this weekly or quarterly, but these days, a calendar month is a sufficient time for a team to show productivity or lack thereof.
8. Year-Over-Year Performance
It’s common for many businesses to experience spikes in results throughout a business year. It can depend on the month, or a number of other factors like holidays or special events. By keeping track of results, expenses, revenue and comparing these values from each month to that same month in the previous year, a CEO can gain a more accurate picture of how the business is performing.
9. Content Marketing ROI
It’s not smart for a business to not invest in content right now, but it’s also important to keep track of its ROI (return on investment). You can do this by checking your bounce rate and conversions per article in Google Analytics. If you’re getting a high bounce rate and low conversion, it means that your leads aren’t delivering and they’re not looking for your product.
10. Cost per Acquisition
“Regardless of what branch of business you’re in, cost per acquisition is of extreme importance as far as key performance indicators go. If your cost to acquire a new client or customer (conversion cost) is greater than the value they bring to your company, then you’re not making a profit. Keep a close eye on your CPA, and consistently try to find solutions to lower its price.
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