How do you know how well your company is performing on a day to day or week to week basis? Financial statements are great, but they only tell you a piece of the story. And they only tell you how well you did last month or last year – not how you are doing in real time. If you wait to find out you lost money last month, it’s too late to do anything about it.
KPI Dashboards are one of the best tools you can implement to track your company performance. They help you know if you are on track and on target with your company goals on an ongoing basis. If you do not have a KPI dashboard that you check on a regular basis, you are missing valuable information.
What is a KPI dashboard?
A list of 3 – 5 Key Performance Indicator, or KPI’s, that tell you valuable information. For example, if you are in retail, you probably have a great computer system that keeps track of all kinds of information, such as “sales per day”, “sales per hour”, “sales per category of items you stock”, etc. This is valuable information, and you probably look at this on a regular basis. But is there other information that tells you more? For example, how many people came through the door versus how many people made a purchase?
And what if you are not in retail, and it’s a little tougher to track? What if you are a plumber, what would you track to know exactly how you are doing on a day-to-day basis? Bookings per day? Calls versus bookings? Billable hours? Do you track these numbers?
Here’s an even better question. What if you want to take a vacation, but still keep a finger on the pulse of your business. What information would you want your team to tell you to know how your company is doing while you are away? Pick 3 – 5 things that will tell you how well you are doing, and then set this up as a dashboard to look at daily or weekly.
My Top Key Performance Indicator at the Golf Course: Real-Life Example
When I owned the golf course, there was one metric that conveyed how well we were doing daily – without knowing dollars, restaurant sales, golf shop sales, and without having to dig up a lot of information. What was that number? The number was how many green fee players golfed every day. I monitored that number fastidiously.
Why was that number valuable? Because if enough green fee-ers golfed, I knew I would have great golf shop sales, restaurant sales, and golf course traffic. This simple number helped me know how well the golf course was performing at all times. If the number was low, I could do something about it, such as advertise or create a promotion, to increase those numbers. If the number was at or above my daily target, I knew we were doing fine. I also tracked membership numbers and 2 other numbers that comprised my KPI dashboard – but the one indicator that gave the most information regarding the performance of my business was that simple number of green fee golfers per day. The best part? I could track it straight from my Point-Of-Sale system!
What is in Your KPI Dashboard?
So what is your number or set of numbers that tell you how well your company is doing? Money in the bank does not count because you do not know what your payables and receivables are. But some key performance indicator examples are: number of customer purchases in a day, number of client meetings or interactions, number of sales, total sales, number of client calls, work in progress, number of leads, number of new clients, number of on-going projects, number of new projects, and the list goes on.
Determine what numbers are most important and create your own KPI dashboard, and keep track regularly. This will help guide your team and your company to success, and allow you to adjust in time to make a difference! Be proactive, not reactive. Congratulations, creating a KPI dashboard and checking it regularly is a huge advantage!
Want to know how your company is doing right now? Take my assessment to see where your company falls on the Business Growth Index.
Cindy Piva is Founder and President of Thrive Business Strategies.