How Do I Keep Track of All the Things Going On In My Business?
Q: As my business develops over time, it seems there are a lot of moving parts to it. I sometimes have a hard time keeping track of all of them on a regular basis. I was wondering if I should keep some kind of “report card” on specific areas of my business so I can see how the separate segments are doing over time.
A: There are a number of measurements that business owners can use in order to track results and determine what actions are necessary to obtain desired outcomes. There are 4 classes of metrics that cover this:
- Result Indicators (RIs): these show what/how your business has done; a snapshot of an outcome. This can be measured in both financial and non-financial ways. These are measured, documented and reported at regular intervals (i.e. daily, weekly, etc.). An example of this may be total sales per quarter.
- Performance Indicators (PIs): tells you what future steps to take based on the results to drive improved performance. These are usually not financially related and is activity based. Can be a single activity. One example is the number of sales calls per quarter.
- Key Result Indicators (KRIs): narrows the field of RIs down to those that are deemed the MOST CRITICAL in measuring the success of the business. This data can be a prime indicator of the health of your business.
- Key Performance Indicators (KPIs): based on the results, tells you what to do to SIGNIFICANTLY IMPROVE performance in the most important areas of your business from the existing list of PIs. Failure to take timely steps as suggested by the information received can tip the scales on the long term success of the business.
Utilizing this system creates objectivity and intelligence in decision-making and resource utilization and allows you to track the progress of your business over time.
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