Know your numbers, know your business: EBI Business Improvement Specialists
You need to know your numbers to truly know and improve your business. This means accurate, timely accounts, presented in a way that you understand.
Learn to understand the difference between “lead” and “lag” KPIs, and ensure that you have KPIs to measure your progress. A lead KPI offers insight into future performance and predictability, whereas lagging KPIs measure what has already happened, such as sales numbers and costs.
Lead KPIs might include new business enquiries, average dollar sales, conversion rates, and cash forecasts. These will help you to identify where you are going, and also to look forward, rather than at the historic data “lead” KPIs provide.
On the other hand, “lag” KPIs include previous monthly sales and revenue, gross profit, and also accounts receivable and payable. Of paramount importance is setting your numbers and keeping a close eye on them. Remember that robust financial practice each month is equally as important as delivering your services.
Don’t judge your business on the balance of the bank account at the end of the month. I can help you determine what is important to measure to move your business forward. Call me for a free, no obligation business review.
