By Lisa Purichia
Partner, Director of Accounting Services & Retirement Plan Services
[email protected]
Now that the fog of COVID seems to be lifting, it’s time to get a clear view of how your business is performing. With the significant disruption in regular business operations over the past 12 months, you as a business owner and manager may be wondering, “What and how do I measure how my business is doing?” One of the best ways to do that is by looking at your specific Key Performance Indicators (KPIs). These are specific data measurements that measure your business operation’s performance in terms of:
- Financial Strength
- Profitability
- Productivity
- Efficiency
Just to name a few general KPI categories.
You will want to measure against yourself. How are you performing now compared to how you were doing this time last year or the year before? What is the trend of your revenue and net profit? Is it going up and down like a rollercoaster? Is it looking like it will hit a plateau?
Of course, you’ll also want to measure yourself against your respective industry’s standards. How have businesses like yours recovered from COVID? Are you keeping up with them? What kinds of crisis protocols do they have in place that you don’t?
During the toughest times of the COVID pandemic, many businesses saw a reduction in revenue, but some were able to manage that by cutting costs. Take a lesson from them. What can you afford to let go of when your budget gets tight? Look at overhead and the size of your staff. What is slowing you down? When you’re trimming in these areas, remember that you’re not facing losses here — you’re creating new opportunities.
Measure yourself in non-financial ways as well. Find a means to gauge your level of employee engagement. Are your staff members true believers in the business, or are they just showing up to do a J-O-B? Are they happy? How can you improve their work environment? Perhaps you can measure employee morale through monthly surveys.
As CPAs, we like balance sheets, income statements and cashflow statements, but as business owners, we know there are many more ways to measure performance and syphon out the weaknesses in our enterprises. Seek those additional key measurements to make your business operations stronger!
It’s vital to look at these metrics on a regular basis and adapt accordingly. Never stop evolving and improving! There is no summit to reach. You can always be better.
If we can assist you further in identifying your Key Performance Indicators and which are important to you and your business, please contact Lisa Purichia at (317) 608-6693 or email [email protected].