Let’s talk about the key stats to measure your business utilizing KPIs or Key Performance Indicators. These are the numbers that indicate how well the business is operating in specific areas that are measurable. These stats can also be early indicators of upward or downward trends, alerting a business that a slight shift in some particular process might be necessary. As we press forward in 2021, there is high value in identifying these early to set your business year up for success.
What do KPIs do for You?
Beyond a P&L which simply gives you a snapshot of your businesses financial picture, developing KPIs for your business could help you to:
1. Forecast business performance more accurately
2. Proactively respond to downward trends
3. Stay connected to your business operationally
Starting Point for Your KPIs
A coaching practice is a very simple service exchange business. I am buying a service from a single supplier. KPIs for this type of business can also be very simple. My recommendation as a starting point for measuring the health of your business through KPIs would be as follows:
1. Percentage of prospect calls (some call these discovery call, prelims, etc.) that convert to clients.
2. Length of time it takes for a prospect to convert to a client.
3. Length of time client remains with you.
4. Number of referrals received from current or former clients.
5. Number of new clients by month.
There are many other KPIs that could be measured, but that gives you a starting point. When we were beginning to take our business more seriously, we purchased a book entitled “The One Page Business Plan”. A great tool they provide are instructions for building your One Page Business Plan. The book provides terrific tools to get you started, without overwhelming, with the most important elements of BP – including metrics.
Tool to Get You Started!
Tracking via a simple spreadsheet would be easy and give you a quick snapshot of your business is doing. We have created a simple template for you to use for this. Click below to join our MCI Bulletin list and to download the Excel file for you to modify and make effective for your business. Hope this is a great starting point for you as you begin taking note of metrics and trends in your business!