Essential KPIs for Every Small Business Owner to Track (Part 2)
- June 30, 2021
- Posted by: Funmilola Sanya
- Category: Business
KPIs (Key Performance Indicators) are the bedrock of every successful business as they are a set of quantifiable measurements used to monitor performance within a business. These indicators provide a quantitative analysis of a company’s business operations. And with this information, a business owner can make decisions regarding the business and ensure successful operations.
Below are some of the benefits of KPIs:
- They help you set strategic goals and objectives for the business.
- They assist in the decision-making process.
- Serves as an external benchmark to compare your business to an industry standard.
- They help business owners create business management policies.
- KPIs provide specific actions and behaviors that leaders and staff follow to achieve short, medium, and long-term goals.
- They can track the amount of capital spent on business operations or the financial return from business opportunities.
No matter the size of your business, you need KPIs to take your business to a higher level and ensure its long-term success. KPIs provide a foolproof management system.
In the previous article, we highlighted some essential KPIs to track your business’s performance. Below are some more metrics:
Key performance indicators (KPIs) in inventory management are metrics that help you monitor and make decisions about your stock. Having too much can cause problems for your business, just as having too little. With KPIs in your inventory, you are informed about sales, costs, turnover, demand, process success, the products that got sold out fast and which products didn’t get sold, and more. And you can improve on profitability, cash flow, purchasing and productions processes, etc. You will also know which processes are successful and the ones that need more work.
We are living in a digital age where the world has become a global village. A strong online presence will be of great advantage to your business. It will have a platform to showcase your products/services and market your brand, have your potential customers find you easily, build strong relationships with repeat and new customers, amongst other benefits.
Tracking your online traffic will help you determine the performance of your social media campaigns and your ROI from them. You would also know if your target audience connects with your brand and how many engagements your social media posts get.
No business owner would love to see their money go down the drain or their time and resources spent on marketing activities go to waste. A business owner should be able to prove the effectiveness of their marketing efforts. By tracking the right marketing key performance indicators such as:
- Visitor acquisition (total website traffic, mobile traffic, traffic sources, impressions, ad click-through rate (CTR), cost per click/pay per click (CPC/PPC), top keywords)
- Conversion (conversion rate (CVR), bounce rate, cost per lead (CPL), average per page visit, average time on page/site, return visitor rate)
- Revenue (return on investment (ROI), customer acquisition cost (CAC))
you will get an accurate picture of the performance of your campaigns, channels, website, and your team, and which one is helping the business reach its marketing and sales goals. With that information, you will then be able to make the right adjustments to various strategies and budgets.
Measuring your accounts payable helps you keep track of how many transactions you’ve made, how much you spend on your suppliers, and how much you pay your manufacturers. Making sure your suppliers, vendors, and creditors get paid on time keeps the business running. Accounts Payable KPIs provide useful data for crafting short and long-term procurement and payment strategies and can be used to hit internal targets and benchmark against others in the industry.
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