The other day, a potential new Client expressed his concern at not knowing how well or otherwise he was doing. He’d heard of ‘KPI’s’ but had no actual knowledge of what they do. So this may give you an idea. EVERY BUSINESS NEEDS A PLAN AND IT’S OWN KPI SET.
K.P.I.’S :: WHAT ARE THEY?
“Key performance indicators” ~ WHY DO I NEED TO USE THEM?
The failure to make a Business plan and then monitor it in some form leads to the collapse (bankruptcy) of around one quarter of all small businesses in the first two years. If you look at a car, you might judge it on fuel economy, safety, style and comfort. These would be the KPI’s for a car. Every business is different. So the KPI for your own business will need to be unique. Establishing them is not hard to determine, and then you can monitor them yourself. Failing to have a control plan will leave you open to not making as much money as you should be. The essential thing is that each business needs to keep an idea of how it is going against competition. Also is it performing as well as it ought to be?‘
Please ring 07 55 34 1298 or 0419 986 362 to discuss or arrange an hour or two to work on this essential item. Following is more information form Wikipedia.
Key Performance Indicators differ from business drivers and aims (or goals). A school might consider the failure rate of its students as a key performance indicator which might help the school understand its position in the educational community, whereas a business might consider the percentage of income from returning customers as a potential KPI. The key stages in identifying KPIs are:
- Having a pre-defined business process (BP).
- Having requirements for the BPs.
- Having a quantitative/qualitative measurement of the results and comparison with set goals.
- Investigating variances and tweaking processes or resources to achieve short-term goals.
Key performance indicators (KPIs) are ways to periodically assess the performances of organizations, business units, and their division, departments and employees. Accordingly, KPIs are most commonly defined in a way that is understandable, meaningful, and measurable.
A KPI can follow the SMART criteria. This means the measure has a Specific purpose for the business, it is Measurable to really get a value of the KPI, the defined norms have to be Achievable, the improvement of a KPI has to be Relevant to the success of the organization, and finally it must be Time phased, which means the value or outcomes are shown for a predefined and relevant period. In order to be evaluated, KPIs are linked to target values, so that the value of the measure can be assessed as meeting expectations or not’. Source Wikipedia.