Be the master of

your business with

key performance indicators (KPIs)

You've already done the hard thing: you decided to start your business.

You went from nothing to something, and making that giant leap is probably the most daunting, if not difficult, thing you’ve ever done. Running a business is a challenge every day. Sometimes it’s a satisfying challenge. Sometimes it’s, well….

It’s up to you to make the choices that will help your business grow and succeed. 

But how do you know if you're doing what is right for your business? Your staff? Your bank account? The answer: you decide what’s important to your success and you measure it—and you do it often.

Key performance indicators (or KPIs) are the tools that help you do just that. KPIs aren't just for big businesses and corporates. They’re critical for small businesses and start-ups to set and track. so you know how your business is performing in its most important areas.

Getting started with KPIs may seem overwhelming. We’re here to break things down and take you through the process step by step.

KPI stock image
KPI Pillar 4 Getting started 9 Spokes

First things first… What are KPIs?

KPI is an abbreviation for key performance indicator—and while that doesn’t sound too exciting, give us a chance to explain why it is.

KPIs are numeric markers for how your business is doing. OK, let us try again. If something is important to your business growth and you can measure it, you can set a KPI that essentially tells you how well your business is doing at that activity.

While it sounds like technical business jargon, KPIs are wonderfully simple, and at their best when they can be summed up in just a few words.

Your key performance indicators signal how well you're doing at achieving the objectives you’ve set for your business, like “growing annual sales”—it says it all and sets a tangible aim and focus for the immediate future.

KPIs aren’t just about winning. They provide the most important data about your business and tell you if you're on the right track, true, but also act as a warning signal when you're not. When set correctly, KPIs offer full clarity about your business performance. With the right data, they never lie.

But that’s just scratching the surface. Below, we’re going to go through everything you could ever need to know about setting KPIs, some KPI examples, essentials, tips, tricks and tools. Ready? Let’s go!

Four essential ingredients for your KPIs

There are a few must-haves when creating great KPIs for your business. Once you have an idea of your area of improvement and want to develop a relatable KPI, you’ll need to take into account the following four things:

  • What you measure
  • The duration
  • Your target
  • Your source of information
KPI Pillar 3 Essential ingredients 9 Spokes

Measure

You’ll want to be as specific as possible when determining what business metric to measure. And you’ll want to make sure it’s the most useful measure when it comes to determining whether or not you’ve achieved your goal.

For instance, if you want to measure Facebook engagement, you might decide to focus on how many people liked, commented and shared your posts, over say the number of impressions you’ve made.

You shall also decide on what form this measure will take—will it be a number (say, the number of new customers) a percentage (the percentage of new customer growth) or something else entirely?

Duration

Just as important as what you’ll measure is how often you’ll measure it. You can’t have a plan to increase gross profit without knowing when you’ll start and finish measuring your gross profitability—the point you’ll start measuring from and when your KPI will be met.

You’ll need to determine the duration you’ll have to meet your KPIs to give yourself a chance to meet your target.

Also, once you set a duration, establish how often you’ll sit down and check in on your KPIs (most likely as a team). If you have a quarterly KPI, you might decide to do this monthly, or even weekly.

Target

Speaking of which, your target is the value you want to achieve—100 online sales in a week, 20% monthly newsletter open rate, 100% project completion by the end of the year.

Your target should be set with frequency in mind, so you can base your numbers on how long you have to achieve them. You might also base them on creating steady improvement from previous periods—more sales this quarter than last. To make this easier and more accurate, make sure you have apples-to-apples comparisons (it may be unrealistic to compare a short month like February with a long month like March without averaging out the days, for instance).

Like all goals, your KPI target gives you something to aim for, so try and find the fine line between realistic and ambitious.

Source of data

What are your means for collecting and reviewing data on your KPIs? Make sure this is determined from the outset so you and any other stakeholder know which hymn sheet to sing from.

You might decide to rely on your CRM to collect new customer data, your POS platform to secure your sales numbers, or your project management software to track completion rates. Ideally using a digital source of data, you’ll find it simpler and quicker to pull together information, so you can even catch up on your KPI progress more regularly without too much hassle.

To track KPIs easier, also consider a data dashboard—although we’ll talk more about the benefits of those shortly. 

Setting the right KPIs for your business will help you be more efficient and enable better and more focused decision-making. With so many different metrics available to track, choosing the right key performance indicators can seem difficult.

Choose KPIs that help you take action within your business and help keep your business growing. Key performance indicator examples include:

  • Financial KPIs
  • Operational KPIs
  • Growth KPIs
  • Customer KPIs
kpi
startup data dashboard

KPIs are actionable metrics that can immediately indicate the health of your business. They also reveal where you should focus your business attention. A data dashboard represents your KPIs, not just with numbers, but also with dynamic, interactive visualisations.

With a 9 Spokes data dashboard, you can easily track KPIs such as Business Growth, Sales Staff Performance, Website Goal Conversions and your Current Ratio - the ratio between your assets and liabilities. Alongside your KPIs, you’ll clearly see the other metrics that may be effecting your KPIs, including staff performance, bestselling products and goal conversions.

When you can easily access all your metrics in one place, it’s easier to make smart decisions. 

Get started with 9 Spokes for free today. Many of our app partners offer free tools and trials
so you will only pay for the premium apps you choose to connect.

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