Whether you want your business to grow in leaps and bounds or at a steady incline, there is no doubt about the importance of business metrics as a tool.
Do you want to chart your progress but are not sure where to begin? Read on for our five step guide to using metrics to drive your business ahead.
1. Define success
Whether you choose one, five or 10 years as a time period to build your goals around, it’s important to draw a line in the sand and define where you want to be. Five year goals provide a good realistic timeframe to achieve some solid successes, so sit down and capture exactly what you want those to be. Where do you want your business to be in five years time?
2. Set your key performance indicators
If you have firstly defined what success looks like you must now use numbers and data to define the way that you will measure the achievement of that success. Identify which measures are important to achieving your goals.
3. Understand your baseline
Any journey has a beginning and an ending. If you want to set measures that will drive your business forward then you will need to start by understanding exactly where you are today. If you can extend numbers back for a reliable time period that will allow you to factor in seasonal changes, external impact and key trends to make sure these are considered when you set your targets.
4. Set targets
To be effective targets must encompass both the measure and the time period within which it will be achieved. If you set a target for a performance level five years from now, you will need to track back to break it down into a workable number. This will both help you decide now if your targets are realistic, and will help you to engage staff or business partners in the change that you want to achieve. Shorter time periods also ensure that any behaviour changes required to drive delivery against targets are immediate: the longer the time period the more you risk procrastination and an unachievable leap as the time period comes to an end. Think how much more motivating it is to target yourself to achieve one sale per day, rather than 30 per month, rather than 360 per year.
Try and avoid using a single metric to measure the achievement of a goal. This protects you from your numbers being skewed in a desire to achieve the metric and not the goal. In the above example it would be wise to consider the value of the sale and the loyalty of the customer as appropriate to support your overall business goals.
5. Go forth and achieve
Once your metrics are in place make them part of the everyday conversation of your business. Everyone should know how you are performing and what success looks like. If you have staff they should feel empowered to contribute to achieving your goals. Rewards should be structured around supporting their achievement.
If you can successfully introduce measures and performance indicators into your business it will become much easier to track your progress towards the growth you desire. But remember that these measures will only be effective if they empower you and your staff to make the changes needed to make them achievable. Introduce some effective growth measures today and with your enthusiasm for their delivery you can expect to enjoy watching your business grow before your eyes.
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