Business performance is ultimately measured in
After all, the purpose of a for-profit enterprise is... making money.
Business success is the result of action. Taking
action is the key to success. Doing something is more important than "the
about what to do, and then do it, and then do it again. Call on that customer and make a sale... or whatever
action brings money in your door.
Business performance indicators will help you do
the things necessary to succeed in your small business. They tend to motivate
you to take action.
Business performance indicators let you see how
your operations are progressing, compared to the goals you set. So,
your primary indicators should be geared to increasing revenue and controlling
||Click on the box...
and have Google start putting money in your bank account!
Business performance is often thought of as simply increasing
revenues, but there comes a point where controlling expenses can add big bucks to the
bottom line. Customers may control your revenues, but you control your
Profits equal revenues less expenses. For most
operations profits are only ten to thirty percent of total revenues. Reduce
your expenses and your profits go up.
Track performance on a calendar (or fiscal) year
basis. I generally recommend that entrepreneurs
track only a few one year indicators and even fewer multi-year indicators, such as:.
- Operating Expenses
- Production Cost
- Customer Count
- Repeat Orders
- Operating Expenses
- Production Cost
The indicators listed above may not be the most important ones
for your enterprise, but you can identify your critical performance areas with
a little thought.
Yearly indicators should be updated each
month. By the fourth month, you'll begin to see trends.
Tracking the most important indicators will ensure that this
tool works for you. Don't spend too much time working the tool. Paralysis
by analysis can be fatal to your enterprise.
Indicators showing multi-year
performance will become valuable over time, as you add each year-end's
Building Performance Indicators
Performance tracking is easily
accomplished in a spreadsheet program such as Excel. These handy programs have
built-in tools to make the job easier.
Each performance indicator should consist of a
and a chart.
The built-in tools I mentioned above includes one that will generate a chart
from your data table. Then when you make entries on the table, the chart is automatically
Build simple and clean charts. Your
charts should instantly convey their message. On clean charts it's easy to see trends, as well as how
you're doing compared to your goals.
Indicators must be updated each month, faithfully. After updating, take a few minutes to
Tracking performance as you go
along shows you which area is starting to show weak performance. Give
these areas a little more attention early, and achieve your objectives.
Some business performance indicators don't have directly
associated goals, but they help you manage your enterprise. For example, a set
of Industrial Safety indicators may include:
- OSHA Recordable Injuries
- Minor Injuries
- Near Miss Accidents
As I mentioned above, business performance indicators
should be tailored to your industry and your company. A nuclear power plant and
a gas station would share a few financial performance indicators, but would also track
several others specific to their industry.
Safety, radiation protection for workers, and security are tracked by the nuclear power plant, while
safety, the number of gallons pumped, and oil changes are tracked at the cabinet shop.
Do you want to use performance indicators, but don't have the time to build
I will send you an Excel file of the Yearly and Multi-year performance
indicators listed above in exchange for a link to http://www.south-of-flagstaff-arizona.com/
me an e-mail with a link to the page on your site showing my link.
The page where you place my link must have less than six outbound links.
My link must remain on your site for at least one year.
Business goal setting and monthly performance monitoring
are valuable tools that will help you manage your enterprise more
A Google search using
the keyword phrase performance indicators will lead you to a variety of
additional resources. Be sure to notice the relevant ads down the right side... those are resources
They don't have to be fancy or complicated to be
Business Performance Program
Performance indicators for Large Business... and how to set up and
administer the program
Critical performance indicators for web site
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