Tracking your Small Business Success with KPIs
In a service business, it can feel impossible to quantify success. How do we show, in a spreadsheet, the stress that we’ve eliminated from our client’s lives?
Of course, we can't. Not exactly. But there are some helpful metrics we can track to ensure we are on the right path to achieving our company mission.
In the numerous conversations I’ve had with other Professional Organizers, I have distilled the reasons we start our business to this:
- We LOVE helping people. The benefits we provide to our community by sharing our passion, helping others, and teaching are unquantifiable, but are a lasting part of our legacy.
- We want to make money! Helping people and doing right by them are incredibly important, but we also need to make money! Tracking our top customer drivers through Key Performance Indicators (KPIs) is essential to increase our bottom line.
No shame, friend, if you are currently asking yourself what the heck KPIs are. It sounds complicated, and it can be. But it doesn’t HAVE to be. Like many components of our businesses that can feel completely overwhelming at first, KPIs seem complicated until you understand their value. Like I say about SO many things (including how to organize your home!)...
Don’t think that in order to track data effectively for your business, you need to know everything about KPIs and have a master’s in statistics. Eventually, you can take your work on KPIs deeper and in more complex directions, but first you just need to start tracking data.
And, to do that, you should have a foundational knowledge of KPIs.
What are KPIs?
KPIs, or Key Performance Indicators, are performance measurements that provide clarity on how different areas of your business are performing. I am a BIG believer in following one’s intuition and business instincts for making business decisions. But I also can’t overemphasize the importance of having data to inform those decisions whenever possible.
Being a CEO is a tremendous amount of responsibility. When you feel like you’re just not sure which direction your business should go next, or where to invest (or, equally as important, uninvest) your time and money, KPIs can help steer you in the right direction.
How to Start Tracking KPIs, Step-by-Step
Step 1: Get clear on your goals
The best way to determine which KPIs you should be tracking is by first getting super clear on what your goals are. Think products, profit, costs, revenue, clients, and team. Anything that can be put into numbers. At Grid + Glam, we have 1 year, 5 year, and 10 year goals within each of those arenas.
Step 2: Track the Right Stuff
The challenge with choosing the appropriate KPIs is making sure you’re tracking the right ones. For example, you can easily track your engagement on Instagram, but it’s a lot harder to track whether that engagement is translating into sales. If you’re aiming to be an influencer, then overall Instagram engagement is a critical KPI. If you are looking to increase sales of your in-person organizing, tracking where your leads come from (referrals, FB groups, IG ads) is a much more helpful KPI. There is no one-size-fits all answer to what you should track because all businesses, and business goals, are all different.
Depending on the stage in your business, prioritizing three to four KPIs at any given time is a good rule of thumb. More than that, and you start to spread yourself too thin on what you are prioritizing, but less than that and you likely won’t have a holistic picture of how your business is running.
My team and I put together a worksheet to help walk you through the process of discovering and tracking your KPIs. You can download it below!
Here are some examples of KPIs to choose from. Remember, choosing three to four is the rule of thumb. Taking one from each category may be a great way to start.
Examples of KPIs
Revenue by Product
Profit by Product
Costs by Product
Step 3: Track Consistently
After you’ve chosen the three to four KPI’s you’ll track, determine how often you want snapshots of the data, and be sure to follow it. You may want to look weekly, monthly or quarterly, depending on the indicators you chose. But, the key here (pun intended!) is to continually track the data at the same time intervals so the data is consistent.
Step 4: Reassess
So you’ve determined your goals, chosen three to four KPIs and you’ve tracked them consistently for a significant timeframe. It may now be time to reassess. Perhaps these KPIs have been incredibly eye-opening and helpful, and you want to build on them. Excellent! Or perhaps you want to start over and track totally different indicators. Either way, staying on top of your KPIs to ensure that they are serving you and your business as they should, is essential.
In a service business, it can be difficult to quantify the benefits we are providing our clients. But, it is not impossible. Look at your KPIs and let them guide you as your business grows and develops. You, and your thriving business, will be better off for it.