Small business KPIs measure your performance for specific objectives and include high-level business goals and role-related ones. The metrics also vary by industry and your business or financial models. Choose relevant metrics and KPIs to gain visibility into operations and the effectiveness of goal-related activities.
Look at your quarterly or yearly business objectives, then identify the metrics and KPIs to keep your company on track. Here are more than thirty important small business KPIs to gauge the health of your finances, workforce, and customer relationships.
Financial metrics
Knowing where you stand financially is critical to nearly every aspect of your business. You should be able to determine your ability to cover operating expenses or an unexpected bill at any given moment. Create profit and loss statements to assess your profitability regularly. Then use financial metrics and KPIs to determine your company's short- and long-term outlook, including cash flow and business profitability.
The top metrics to track include:
- Revenue growth rate.
- Gross profit margin as a percentage of sales.
- Net profit and net profit margin.
- Cash flow.
- Accounts payable turnover.
- Cost of goods sold (COGS).
- Customer acquisition cost (CAC).
[Read more: Out of the Red and Into the Black: How Three Startups Achieved Profitability]
Customer KPIs
More than 45% of respondents to a SuperOffice survey said customer experience is their top priority. Indeed, business leaders should have their fingers on the pulse of their clients. The best way to do that is by setting customer service KPIs. Service metrics help you measure and improve customer experiences while finding opportunities and potential problems. According to Salesforce, customer satisfaction, effort, and retention are among the most important customer service KPIs.
Consider monitoring metrics, like:
- Customer satisfaction rates (CSAT).
- Net promoter score (NPS).
- Customer lifetime value (CLV).
- Customer purchase frequency.
Human resources (HR) indicators
A large chunk of your budget goes to workforce expenses, from labor costs to benefit administration. Human resources metrics and KPIs monitor the employee side of your operations, offering insights into engagement and productivity levels. You can also use KPIs to determine when to update your benefits and compensation package. Failing to meet certain metrics may indicate a problem needing immediate attention, such as higher-than-expected absenteeism or churn rates.
Check out these HR metrics:
- Employee turnover.
- Time to hire.
- Absenteeism.
- Employee engagement and satisfaction.
- Benefits administration.
Almost 90% of consumers start their shopping journey online, according to Salesforce. Pick KPIs to track their experience, shopping habits, and satisfaction levels.
Sales and marketing KPIs
Marketing efforts generate leads, and sales increase your revenue. Yet, according to a Keap survey, 46% of surveyed small business owners "are unsure their marketing strategies work, and 17% know they aren't working." Use sales and marketing KPIs to define success and achieve business goals. Your metrics will differ for upper management and team members but should align with your overarching objectives.
Sales and digital marketing KPIs include:
- Funnel drop-off rate.
- Website traffic.
- Cost per engagement.
- Upsell and cross-sell rates.
- Close ratio.
- Volume of new opportunities.
- Percentage of leads followed up with.
[Read more: 5 KPIs to Measure Your Business’s Marketing Success]
Brick-and-mortar KPIs
Your physical storefront metrics will vary according to your industry. You may need to track production or supply lead times. Or factor in foot traffic and point of purchase (POP) sales. If you also sell online, choose a few KPIs for comparison purposes. This helps you see how sales and order sizes differ between channels.
Common KPIs for stores and restaurants are:
- Sales per square foot.
- Inventory shrinkage.
- Average in-store transaction value.
- Year-over-year growth.
- Revenue per employee.
Online and e-commerce metrics
Almost 90% of consumers start their shopping journey online, according to Salesforce. Pick KPIs to track their experience, shopping habits, and satisfaction levels. If you sell on multiple channels, develop metrics for each one to understand which channels underperform and why. Also, consider setting goals for operational methods, such as the length of time required to pack a new order or process a return.
Here are a few e-commerce metrics:
- Shopping cart abandonment rate.
- Conversion rate.
- Inventory turnover rate.
- On-time delivery or fulfillment.
- Average order value.
- Revenue per visitor or visit.
[Read more: 7 Ways to Improve E-Commerce Customer Retention]
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