Assume for a moment you’ve just been given a business. It’s the 11th of the month and the monthly sales so far are $52,000.
Is this a good month?
Unless you’re running on gut feeling alone, you won’t be able to answer, because you don’t know the details of the business.
Now look at your business, could you honestly say what your sales should be at each date in a month? Do you calculate your sales daily? Do you know the targets you need to make? Or what the outgoings will be that month and the shortfall you will need to make up? Don’t worry, if the answer is no, you’re not the only one.
The Importance of Key Performance Indicators (KPIs)
KPIs are critical across your business, but no more so than in your financials. They are the critical numbers that need to be maintained and measured daily, weekly, monthly, quarterly, annually or on a project-by-project by project basis, to help you monitor and predict the overall health and efficiency of your overall operations.
They can help you make informed decisions about your business regarding budgeting and resource allocation, help you avoid being blindsided by poor performance and help you detect inefficiency or even fraud.
Your 7 Key Numbers for Strategic Growth
So what are the key numbers you need to monitor? Here are the seven critical numbers you should know about your business:
1. Sales
Your sales can tell you a lot about your business. What products are trending, which are decreasing, which maintain the same level. They can help you monitor seasonality and the performance of your marketing campaigns. However, it is important to remember that they should not be looked at on their own. They should always be monitored alongside the bottom-line performance. After all, it does not matter if your sales are steady or even growing if your margins are shrinking.
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