08 Sep KPI’s
With the tighter times in the last 3 or 4 years, many businesses have tidied up, become more efficient, and focused more on profits. While you cannot cut your way to prosperity, they have controlled costs and kept a much closer eye on bank balances, credit control, and cashflow.
Most businesses have just a few really important figures. These are Key Performance Indicators or KPIs. They will be different for different businesses but can provide quick feedback and early warning on any potential problems.
KPIs for our business brokerage are sales, new listings (i.e. stock on our shelves), conditional sales (future income), number of salespeople, marketing spend (a major variable), and estimated profit. Based on our annual budget we have figures for each category and results for each are posted in one of 3 columns. Crisis, Expected, or Exceptional. If a figure falls in the “expected” column then that is good, we sleep well. If it is in the “exceptional” column we celebrate, but if it is in the “crisis” column, we are alerted to where our urgent focus must be. Our KPI sheet hits my desk on the 1st day of each month and I regard it as our most important performance check. We “borrowed” the idea from a book on Domino’s Pizza some 20 years ago – thank you.