Setting KPIs for your Business: 6 Tips
Posted on 18th June 2021 at 10:50
This content will be shown in the summary on the main blog page. Click on this text to edit it.
KPIs (Key Performance Indicators) are metrics that tell you if what you’re doing is working or not. As you can imagine, this makes them incredibly important for productivity and business growth.
How do you know that you’re on the right track to achieving your goals if you don’t measure progress?
How do you know that you’re doing exactly what you should to get to the place that you want to be?
The short answer is, you don’t.
If you want your team to work more efficiently and if you want to actually reach the goals that you set out for your business, you need to start setting and monitoring the right KPIs. Here’s how:
1. Set KPIs for Everyone
Regardless of the size of your business and team, you need to set KPIs for each team member. Metrics allow you to measure performance and improve it, so don’t be tempted to not set them at all.
2. Don't set too many KPIs
This is a big mistake that many business owners make. Avoid this. Less is more when it comes to improving performance, as too many goals affect focus. Aim to have no more than 5 KPIs for each team member.
3. Choose KPIs that are Relevant to the Business’ Overall Goal
KPIs need to directly link to the demands of the individual’s role and what your business is trying to achieve, so look at your business plan. Where is the business going? What are the key figures that you need to know and measure?
4. Agree on these with each Individual
Once you’ve chosen the KPIs for each individual, sit down with them and agree on them. Set your expectations but also explain how they will support the business, by achieving these targets. The more you can show them how they contribute to the overall success of the business, the better.
5. Measure and Monitor KPIs
It’s not enough just setting KPIs, you need to measure and review them. Setting and monitoring KPIs is an essential business development task, so schedule in time to review this data every month. When you do, you’ll see what tweaks you need to make to improve productivity and move the business forward.
6. Review and Reset these every Quarter
As your business grows and changes, your targets will be out of date. Make sure to review them with your team every 3 months so that you can update them and ensure they are still relevant. During this time, give your employees feedback, seek out their views on what is working or not working, tell them how the business is performing, and discuss what they can influence to move the business forward.
Start getting Results by Setting KPIs
Don’t just set arbitrary goals, set KPIs too. If you do, and you track them and monitor performance, you’ll soon see if you’re getting the results that you want. If you’re not, then the great thing about KPIs is that you can identify that something isn’t working a lot sooner. All it takes is another tweak here and an improvement there, and you’ll find what works best for you and your business.
Call your friendly Farnborough Accountant today
We are Specialist Accountants serving plumbers, builders, electricians and all other trades, providing business advice, compliance, bookkeeping, CIS, tax returns, payroll, VAT, management accounts and cash flow forecasting
Or call us on 01252 856 150
Book a half an hour discovery meeting with us - find out how we can help your business
Tagged as: accountants for small businesses, Accountants for trades, Accountants in Farnborough, Business blog, Business Tips, here to help, Key Performance Indicators, KPI, tips and advice
Share this post: