Many small business owners know what they want, they know where they want to be, but somehow getting there is always a little more difficult than it seems.
Growing your business is a challenge, there is a school of thought that says you need to grow to stay still as staying still will see you go backwards. We tend to agree with this sentiment, so how do you start growing your business?
To give you an example of key metrics in use, then let’s use a couple of examples;
- Estate Agent – Mr Estate Agent knows that on average, for every 7 viewings a house has he will get one offer to buy. He knows that to get 7 viewings takes 21 phone calls to his marketing list. He also knows that it takes 3 offers for 1 to be accepted. His key metric here is in having 21 interested parties for each house for sale. He measures performance against buyers contacted
- Widget Manufacturer – This company buy in raw product, store it, then it gets made into widgets and sold. Their issue is that their cash sits in raw product. The key metric here is stock turnaround. All raw materials need to be used within 7 days, if not then reduce the next order, or improve production
As said, key metrics are different in every case. They are also not that easy for a growing business to identify, so we would encourage you to seek external advice as this can make things clearer.
If you want more information on using key metrics in your business then please add your comments above, or contact us via the website.