Turning your Key Metrics into a dashboard
Tracking revenue is just one measure of your business’s success, but unfortunately it tends to be the (only) key metric that small businesses track. And when you don’t hit that $10k month or $100k year, you’re upset for not hitting the right number.
Here’s the thing, sister: There are so many other metrics in a new and growing business that have little to do with revenue, but have everything to do with your success. These are your key performance indicators (KPIs).
A KPI measures how effective your business is and helps you evaluate how well your business is doing to achieve your goals. It gives you feedback on exactly how you’re doing and allows you to cast a vision for the future.
Of course, you need to know what your goals are if you’re going to move in the right direction. I recommend reviewing and updating your mission, vision and values on a regular basis (at least twice a year) so you always know where you’re going. Listen to this episode of The Ops Authority Podcast to get started with that! From there, you can start building out your KPI dashboard.
Identify your objectives
I spend a lot of time talking about strategic objectives. And for those of you tired of hearing about them, I’ll never stop. They’re that important to the success of your business.
The reason you set up your strategic objectives regularly (each quarter) is because you need to know where to focus the time you spend working on your business. You’ll know you’ve been successful if you’re doing the work and moving the needle, but even more so you’ll see changes in your KPIs too.
Know your true KPIs
Not all metrics are valuable for your business, and you don’t need to track all metrics right now. Instead, identify KPIs that demonstrate the effectiveness of the objectives you’re working on.
If one of your strategic objectives is to improve your customer experience, think about how you can measure that. Some metrics that come to mind are improving customer retention and customer survey results. Customer gifts are a nice thing to do but they’re not measurable. When you have limited time, it’s important to focus on the measurable tasks so you know that your efforts are not fruitless.
For businesses that are working on scaling, team development might be a strategic objective for the year. To be more specific, you want to improve the performance of each team member. Think about ways you can measure the ROI of each person you employ–either dollars generated or dollars saved or growth in other areas based on the work that team member is doing. You can also measure the professional development each team member participates in, but more important is its impact on your business and your bottom line.
Find the right tool & Set it up
Once you know what you’re going to measure, you need a tool to keep track of the KPIs. I recommend putting your numbers all in one place so they’re easy to review on a regular basis. My favorite tool for this is a Google Sheet because you can give access to key stakeholders and it’s a living document that’s always up-to-date. Airtable is another great option that does essentially the same thing.
Next you need to set up your dashboard so it’s clear what you’re measuring, where that information is coming from, who is responsible for the metric and how much growth you have over time. Set it up so you can easily plug in metrics each month and add formulas so that your quarterly numbers are calculated automatically.
This is just one example of what a dashboard can look like if the strategic objectives are financials and visibility.
As the business owner, it’s not your responsibility to update the KPI dashboard; this is something that key team members should do on a regular basis. Your marketing department should track all marketing and visibility metrics while your sales team should be responsible for sales metrics and customer service staff for their own numbers.
Set up a date for each responsible party to record their KPIs each month and hold them accountable to it. Each team member should understand the strategic objectives and the reason for the KPI so they can strategize ways to improve the metrics month over month.
It’s not enough to record your metrics; you also need to review them with each department or team member. Some questions to help guide the conversation include:
- Did we meet our target for this KPI?
- Why or why not?
- Were there any anomalies in the market that impacted the metrics?
- What can we do differently in the next month to improve the metrics?
- Is this KPI still an important one to track, given where the business is today?
In your review meetings, it’s important to take action to continue forward momentum so your metrics improve. This is a great opportunity for team brainstorming and allowing for an open exchange of ideas.
Throughout the course of your business, your KPIs can (and should) change. One season is for scaling while another season is for visibility. It all depends on where your business is today and where you hope it will be tomorrow. But no matter what your goals are, it’s vital that you keep a dashboard to continually measure those KPIs.