Note: Running 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.
Do you know your corporate Key Performance Indicators? Are people asking for a Benchmark Report on your business? As your company grows, are you treading water? Are you ahead or behind of your competitors? Success leaves clues, so do you know where to look? We call these clues your corporate DNA.
If you know your corporate DNA, you can adapt to changing business demands more readily. There are several areas that make up corporate DNA. These include but are not limited to: revenue growth, operating income margin, percentage cost of good sold, days sales outstanding, days in inventory, and days purchases outstanding.
Corporate DNA must be combined with performance metrics to drive success.
No matter what metric you use, make sure it is easily understood by many managers throughout your company. Use the metrics to reward performance of your employees. Also, make sure your corporate DNA relates to shareholder value.
Make sure you know the comparison between your corporate DNA and your industry. If you do, you can implement improvement plans to put money in your pocket.