What KPIs should you track when expanding your business, and how can you measure success?

Suppose you are driving a car. The dashboard of your car is like a business, and the gauges on it represent different aspects of its performance. Now, consider the speedometer as a Key Performance Indicator (KPI). Your speedometer tells you how fast you're going, helping you stay within the speed limits & ensuring a smooth and safe journey. Similarly, in business, KPIs act like speedometers for different aspects of your business operations. They provide real-time information on critical metrics, helping organizations navigate towards their goals, stay on the right track, and make adjustments if needed. Just as a driver relies on the speedometer to manage their speed, businesses rely on KPIs to manage and optimize their overall performance.

Sometimes when we prepare KPIs, employees who are given the task of achieving the KPI target do not understand how to measure it and how to achieve it. For this reason, make sure that we provide KPIs that can be measured by employees' achievements, and ensure that they are provided with adequate resources to achieve them.

When expanding your business, the KPI to track would depend on the strategic objectives of the expansion. if for instance, it's a geographical expansion but within the current services or products, the KPI to track could be customer acquisition. However, an expansion that involves new products or services in the current operating location, may track a customer retention KPI. A balanced scorecard can be a useful tool to track these KPIs.

To understand if your programs, initiatives, or campaigns are making a difference, you must have KPIs. Without measurement, you have no indication of progress or decline. There are two types of KPIs: leading and lagging. Lagging indicators are KPIs that reflect what has already happened, i.e., revenue, number of new sales. Once you know your lagging indicator KPI, it's too late to change or adjust your efforts for that period. Leading indicators are KPIs that help you understand how you're doing before it's too late. For example, pipeline value, conversion rate, and number of first-time meetings are leading indicators that will help you understand if you are on track to reach your goals or your lagging KPIs.

When you expand, the most critical skill you need in your team is coaching & ability to inspire others to work more efficiently & grow. To make this tangible, you need to ensure the systems are in place to gauge your organisational capacity as a whole & your team members individually. Then the most important KPI for Middle management should be the Retention of New hires and their capacity enhancement. Your KPIs should always be aligned with the long term goals, otherwise they would do you more harm than good.

Before you chart a path to expand the business, it is critical to understand the total addressable market (TAM), the minimum viable product or service that has a strong enough value proposition to attract customers, and the customer acquisition strategy. Early in the expansion, new customers is the most important KPI. If it is a complex product or service, it may be important to measure qualified meetings with prospects as an indicator that the expansion is moving in the right direction.

It is important to understand that often, as with many projects, there are metrics for controlling performance during an implementation and those that are required for business success. These are complimentary, but not necessary the same. An expansion might be demand volume, adding to existing facilities or adding new products to your GTM proposition. Understanding this nuance, one can work on short range KPIs that indicate when an intervention is to be made, or confirm "expansion is in control". Once the expansion has been completed, the final short range KPIs can be reviewed and then abandoned. Importantly business KPIs remain a focus before, during and AFTER the expansion. Short range KPIs should be designed to point to action items

When it comes to expansions, KPIs are vital tool to keep on track. Expansions can easly turn to be chaotic, having a clear measurment tool always the way to stay focus and sharp in achieving your goals.

The right KPI’s are a critical component to measuring growth. The biggest mistake I see are with companies who have too many irrelevant KPIs - they are not actionable and just create data clutter. One of the simplest, but most effective KPI is your periodic book to bill ratio. Anything over 1 indicates expansion, less than 1 is contraction.

You can't argue with them. They provide an objective measure on whether you are improving or not. People can argue anything, but numbers don't lie!

Choosing SMART KPIs can be a little confusing for biggners, but actually once it is mastered, this skill can be reflected to many ways of human life. You can start putting realistic and achievable goals and targets to your self not only for business

As there are many forms of expansion, so there are many potential KPIs. We have expanded by launching new products, by organically entering a new industry or geography and by acquiring companies. I will focus a on the last, acquiring another organization. I like to look at KPIs using a balanced scorecard approach so we don't overweight one area. We set 1st and 3-year goals for PEOPLE in areas such as retention and engagement, for CUSTOMER retention as well as Net Promoter Score, for PROCESS and TECHNOLOGY integration and FINANCIAL performance.

There are certain characteristics that should be considered and can be instrumental when choosing KPI's: - Firstly KPI's should be relevant to the goals and objectives of the organization. They should be aligned with the overall strategy and provide insight into the areas that are most important for success. - KPI's should be measurable in a clear and objective manner this means that there should be a defined method for tracking and reporting progress toward the KPI. - KPI's should be specific and well-defined. They should focus on a specific area of the business and provide a clear target for performance - KPI's should have a defined time frame for achievement. This helps to provide deadlines for achieving the desired outcomes.

In order to choose the most suitable Key Performance Indicators (KPIs), it is crucial to first identify your specific expansion goals and thoroughly understand your business context. This involves analyzing your business operations, identifying areas for improvement, and then selecting KPIs that will provide you with the relevant and actionable insights needed to achieve your expansion goals. It is important to note that KPIs should be aligned with the broader business objectives and should be regularly reviewed and adjusted as the business context evolves.

Selecting KPIs for business expansion is like setting up navigational beacons. The key is to ensure they are SMART, mirroring your specific goals and context. Imagine leading indicators as scouts, giving you a glimpse of what might happen, and lagging indicators as historians, telling you what has occurred. This balanced approach provides a clear, actionable roadmap for your expansion journey, tailored to your unique business landscape.

All KPIs must be measurable and it is always good to have some financial and non financial KPIs. Personally as a CFO, I monitor all my KPIs through my financial modelling, but tools like PowerBI, Hubspot and your ERP system are also good for larger companies. Automation is key though. The more you can automate the easier it is to monitor

La medición de un KPI depende directamente de la obtención de los datos objetivos por medios distintos, que permiten tras su análisis, dimensionarlo, acotarlo, ajustarlo y entenderlo. Dándose un escenario nuevo cuando la medición de los KPI se hace para un conjunto de ellos, portfolio de KPI’s, añadiendo un factor subjetivo nuevo que afecta los tres niveles (operativo-analítico-estratégico) que es crítico para valorar resultados de una estrategia. En este sentido el peso de un KPI y su rendimiento en el conjunto de un portfolio depende de la intuición, creatividad, sensibilidad, asociación y en definitiva del alma del que toma decisiones para la gestión de rendimientos en la obtención de un resultado esperado.

For effective measurement of your Key Performance Indicators (KPIs), it is essential to follow these steps with utmost precision: 1. Establish baseline data: Determine the starting point for each KPI before expanding. This provides a reference for measuring progress. 2. Choose appropriate measuring tools: Use relevant software, databases, or manual tracking methods to gather accurate data for each KPI. 3. Monitor progress regularly: Schedule regular reviews of your KPIs to identify trends, analyze performance, and adapt your strategy as needed. 4. Communicate results: Share KPI data with stakeholders to maintain transparency, ensure alignment, and celebrate successes.

Use many of the analytics tools in the market in addition to your core systems, live data is essential since historic one only could lead to irrelevant conclusions. Too late to act

Além do básico que envolve ter uma fonte única e confiável de dados, frequência adequada de medição, diria que o principal ponto é a diligência e principalmente a manutenção da cultura de dados.

Worth mentioning about reverse KPI's - if an organisation's performance is dependent on the external factors like feeds from a vendor or 3rd party inputs etc., then reverse KPI's should be in place. It becomes very critical if there is a monitory impact on the billing. This is very much prevalent in the offshoring industry especially if the offshoring is done to a 3rd party.

Stick to 3-4 KPIs, on top of total revenue and profits, and ensure they focus on what you really need to track progress. These will change as your goals and short term focus change as your business grows. If you are a startup, your first years’ KPIs might not be focused on profitability but on adoption metrics. Then as you grow, metrics of retention and customer satisfaction will become important. Re-evaluate on at least on a yearly basis and don’t hesitate to do so more often if your context is quickly evolving. KPI dashboards are meant to guide you on your expansion journey. If they don’t provide a clear picture of where you are and where you’re going, you need to re-evaluate them.

Hablamos de KPI´s y la naturaleza de su definición. Debemos tener claridad en diferenciarlos de los OKR´s, pero también claridad en identificar la concatenación que tienen con ellos. Los O´s definen el rumbo, los KR´s son como los KPI´s, la diferencia es que los primeros pueden incluir definiciones cualitativas, pero los segundos no deberían permitir definiciones que no fueran Cuantitativas y bajo el modelo SMART. Las preguntas que yo me haría son: ¿Cómo incluimos en este enfoque estratégico-operativo a los KBI´s? ¿Que nuevos indicadores deberíamos considerar en la Transformación Digital de las empresas? ¿Deberían estos diferenciarse de los KPI´s por su relevancia, por ejemplo los KTI´s (Technology Indicators)?

There is only one KPI every business owner needs to know to track progress. What is your buyout number? If someone writes a check today to buy your business what is that number? That's the only one you need to know. Everything else is fun data points, but they aren't the end game. Too many business owners do not know their buyout number. If you ask me nicely, I will help you to figure out your buyout number. Know that and then nothing can stop you.

KPIs must be clear, i.e. their creation and influenceability could be understood by everyone involved and they must be accessible. If there are more than 3-4, they are wrong. With a focus on corporate growth, is is important to look for sales growth compared to last year, EBIT growth compared to last year, development of the NPS and the employee NPS.