Key performance indicators (KPIs) are measurable values that can help to ease the pressure of early-stage entrepreneurship by helping to understand how a business effectively achieving its goals.
They can keep projects on track and make big goals seem less ambitious and more easily attainable, breaking them down into tangible goals. It's up to you to choose your KPIs by asking yourself "What are one to three things that I look at every day, every week and every month?".
Make your KPIs easily manageable
You should prioritize a few manageable KPIs that will help you to work towards your targets on a daily basis. Break down your goals into an achievable action each day.
Even if it can be tempting to set ambitious KPIs, the key to success is this achievability. For example, if you have the goal ton contact 200 clients a month, 50 clients a week, then, with a daily basis it reduce the action to 10 contacts, which seems more easily accessible.
Lagging, lead and live indicators
A KPI management process implique to sort the metrics into different types of indicators, lagging, lead or live. Archiving a goal will be a mix of them.
A lagging indicator is a measurement quantifying your past performance that will help you understand trends while a leading indicator is an action that will lead onto something.
Let’s take an example to understand. Your goal is to reach a turnover of £100 000. The amount of cash on your bank account is the lagging indicator. The leading indicator is the number of client you need to meet and secure. A client worth £1000. Then you’ll need 100 clients. If you secure a client every 10 meetings, you’ll need to meet 1000 people to achieve your goal.
Finally, a live indicator tracks your current performance. For example it can be the number of sales or your website visitors metrics.
How to chose your KPIs
To stay focused and productive you should be selective when choosing your KPIs and make sure they are aligned with what other players in the company do.
You must also choose KPIs adapted to the departments of your company and which are complementary.
CEO, sales team and marketing team won’t focus in the same metrics even if their final goal is the same as yours.
Finally, make sure your KPIs are exciting and engaging for all your team. Do not hesitate to ask an accountant who knows about startup business to help you with your KPI management.