What do I Need to Measure in my Business?

In the world of business, especially for small and medium-sized enterprises (SMEs), there is an adage that rings true: “What gets measured gets done.”

It underscores the significance of keeping track of specific numbers to enhance operational efficiency, productivity and profitability. These ‘numbers’ are not just arbitrary figures but meaningful indicators, often known as Key Performance Indicators (KPIs) and are tracked on weekly scorecards, that clearly illustrate the health and success of your business.

KPIs are quantifiable measures that allow businesses to evaluate their performance over time. They provide a clear picture of where your business stands and the progress made towards each set objective. Depending on the nature of your business, the KPIs may range from marketing spend, sales enquiries and closed deals to amount invoiced, or productivity levels.

Take, for example, a company in the IT sector might focus on sales enquiries and closed deals. These two metrics offer crucial insights into the effectiveness of the sales team and the appeal of the products and services offered. On the other hand, a manufacturing business might prioritise productivity levels and the amount invoiced to assess their efficiency and cash flow.

Marketing spend, another critical KPI, helps in understanding the return on investment (ROI) from different marketing channels. By comparing marketing spend against the leads generated or deals closed, businesses can reallocate resources to the most profitable channels, thereby maximising their ROI.

Yet, KPIs are only as useful as the regularity of their analysis, and this is where weekly scorecards come in. A weekly scorecard is a tool that facilitates tracking and review of these KPIs on a regular basis, typically every week. It serves as a concise report card, providing a snapshot of how the business is performing in key areas.

The advantages of utilizing a weekly scorecard are manifold. It encourages timely course correction, maintains team focus, and promotes accountability. For instance, if the scorecard shows a dip in sales enquiries, it signals an issue with the lead generation process that needs immediate attention.

Similarly, tracking productivity levels on a weekly basis can highlight operational inefficiencies. If productivity dips consistently, it might be time to re-evaluate processes, tools, or even team motivation and skills.

On a larger scale, weekly scorecards can foster a culture of continuous improvement and instil a sense of ownership among employees. When everyone is aware of the key numbers, it helps foster a results-oriented mindset where everyone is aligned towards the shared goals of the business.

In conclusion, the principle of ‘what gets measured gets done’ is not just a strategic approach for large corporations but a mantra that SMEs can live by for sustainable growth and success. Harnessing the power of KPIs and weekly scorecards can drive your business towards clarity, efficiency, and profitability, by ensuring that every step taken is measured, monitored, and, therefore, meaningful.