Note: Running most Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur’s Playbook page of the PKF Texas website.
Any sports fan knows there are statistics that coaches use to evaluate and improve the team’s performance. The same principle can be applied to your business using Key Performance Indicators or KPIs.
So how do you start? Identify the area of your business that has the most possibility for improvement. Focus on particular areas of concern and don’t try to track too many indicators at first.
For example, you may be tracking gross revenue each quarter. But what is that really telling you? How are you obtaining growth or, more importantly, what is causing a decline?
To answer those questions spend time with your management team. Brainstorm and agree on the top two or three KPIs that are contributing to your success or decline. Using a force field analysis can be helpful. Then determine who will track the measurement and distribute the information on a daily or weekly basis.
Next week, we’ll discuss a sample equation that demonstrates the process for a sales KPI.