10 KPI's (Key Performance Indicators) Every Business Needs
KPI's (Key Performance Indicators) are essential tools for any business. They help you monitor, measure, and track progress towards imperative company goals.
An effective KPI dashboard should provide a quick and easy way to visualize your performance and make informed decisions.
The most powerful KPI dashboards provide an overview of how your company is doing in multiple areas, such as sales, marketing, operations, and financials, while tracking actionable metrics like customer satisfaction, customer acquisition and retention, efficiencies, financial performance, and more.
The benefits of a well-built KPI dashboard include:
Increased visibility into business performance
Improved decision-making
Quick and easy tracking of key performance indicators
Real-time insights into trends and areas of improvement
Improved accuracy in reporting
Ability to identify potential areas of improvement
Access to detailed data behind the metrics
A KPI dashboard is a great tool to help you monitor and measure the performance of your business.
By properly utilizing this tool, you can quickly identify trends, areas of improvement, and potential risks. and ultimately make better, data-driven decisions and increase the efficiency of your business operations. With a purposefully built and automated KPI dashboard, you can make sure you are on track to reach your goals and stay one step ahead of the competition.
Here's ten common KPI's you can use to start your own dashboard
CAC (Customer Acquisition Cost): The cost and resources required to gain a new customer, used with customer lifetime value (CLV) to evaluate the ROI of acquisition efforts.
CCR (Cash Conversion Ratio): Operating cash flow divided by net income.
CLV (Customer Lifetime Value): Total revenue generated by a customer across their entire journey with the company. CLV should be paired with customer acquisition cost (CAC) to chart sustainable growth.
DSI (Days Sales in Inventory): Average Inventory divided by Cost of Goods Sold multiplied by 365 days
DSO (Days Sales Outstanding): Accounts Receivable divided by Total Sales multiplied by number of days
DTE (Debt-to-Equity Ratio): Total liabilities divided by shareholders’ equity.
MRR (Monthly Recurring Revenue): Total customers each month multiplied by the average revenue generated per customer.
OEE (Overal Equipment Effectiveness): Availability x Performance x Quality = (Run Time / Planned Production Time) x ((Ideal Cycle Time × Total Count) / Run Time) x (Good Count / Total Count)
OWR (Opportunity Win Rate): Opportunities won divided by total opportunities.
TAM (Total Addressable Market): The total potential demand for a particular product or service.
How to build an actionable, effective KPI dashboard for your business in 4 simple steps
1. Clean up your garbage...data management
Garbage in, garbage out. Make sure you vet your business data for integrity and accuracy before you even think about making a dashboard.
2. Ask better questions
What are the best KPI's that align with your business current state and future objectives? Be specific, realistic, and choose five high-impact KPI's based on the information you need most at your fingertips
3. Customize as much as you want
Just make it look good! It should be themed with your company colors, and have clear visual indicators for on or off targets.
4. Include multiple levels
Back it up with the detail behind the summary report. You want everyone to see the big picture, and be able to drill into the details that are most relevant.
To create a KPI dashboard tailored to your goals you will want the support of someone who’s been there, so you can focus on driving the business and using the data to make well-informed decisions.
Put your business in a better position today to strategize for the future with solutions in data visualization and KPI reporting.
Coast to Coast Finance will connect you with an experienced financial professional who can quickly analyze your business and help you overcome any financial obstacle you may be facing.
Schedule your complimentary CFO consultation.
~To the health and wealth of you and your business~