What are KPIs and Why Your Small Business Should Use Them

Jan 8

So, what are KPIs? We know three letter acronyms are notoriously reserved for government agencies, but today we’re talking Key Performance Indicators! *the sound of no one clapping but our team* Woo hoo! KPIs are measurable values that show how effectively a business is hitting its goals. Importantly, they provide clear markers for success on your path to growth. For small businesses, KPIs are really helpful for making basic data-driven decisions and keeping the business on traceable tracks.

Here’s a few reasons your small business should use some KPIs:

1. Track Progress

KPIs help you measure success in specific areas, whether it’s increasing revenue, growing your customer base or improving efficiency. Regularly tracking KPIs can help you stay focused on what matters most to the growth of your business.

2. Improve Decision-Making

By providing measurable data, KPIs take some of the guesswork out of decision-making. For example, if your sales KPIs show a decline, you can shift your strategy before problems escalate and the business suffers (no one wants that!).

3. Align Your Team

KPIs clarify goals for you and everyone involved with your organization. When your team knows what metrics you’re aiming for and what they’re supposed to aim for—everyone can align their intentions and focus their energy accordingly.

4. Drive Growth

KPIs highlight what is working and what is not working, allowing you to replicate successes and address clear weaknesses. This continuous improvement is key to growing your business in a sustainable fashion.

Examples of KPIs for Small Businesses:

Financial: Revenue growth, profit margins
Customer: Retention rates, satisfaction scores
Marketing: Website traffic, conversion rates
Operational: Delivery times, error rates

There you have it. No one is going to send the KPI after you, but they are essential for turning your goals into measurable business results. By identifying and tracking the right KPIs your small business can stay adaptable, improve its performance and achieve growth sustainably — the way we prefer to do it here at alesce!

alesce team