Business profitability and growth not where you expect?  If the only operational KPI’s you review are on your financial reports, then you don’t have the control necessary to influence your business’ performance, resulting in decreased profitability and less dollars going into your pocket!!!

“So, what else should I be looking at?” you might ask. A very good question!

Financial resources only give you 1 of 4 factors influencing business growth.  So, if you’re not monitoring the other growth factors, then you’re only monitoring 25% of what’s happening in your business.

monitoring business systems with operational KPI's

To monitor the other 75% of your business you need operational key performance indicators (KPI’s) which show you the activity occurring at every stage of your revenue engine. Using an operational approach helps you establish accountability at every level of your business, which helps you can improve efficiency resulting in improving profitability.  This sets a better foundation for accelerating growth.

Monitoring Operational KPI’s for Improved Business Performance

DE, Inc developed a comprehensive, yet simple, method of monitoring operational business performance which is called Tuning Your Revenue Engine. Watch the video below and see how this powerful management model gives you improved capabilities for growing your business:

When you apply Tuning Your Revenue Engine to your business, then you begin getting answers to all the following questions and many more:

  • How much revenue is your business currently capable of generating?
  • Can you successfully hit your revenue goal for the year?
  • What is your operation’s maximum capacity limit and when will you hit it?
  • How much capital will it take to increase capacity in support your revenue goal?
  • When will you need this capital infusion?
  • Are your prices set correctly, or are you leaving money on the table with every sale?
  • How many more sales must you close to reach your annual revenue goal?
  • Do your current marketing efforts generate enough leads to support the revenue goal?

Regularly Meetings to Monitor Business Performance

Better meetings using operational KPI'sAnother benefit from all this information is that regular management meeting become shorter and more meaningful.  Using your revenue engine KPI’s, you can monitor if enough activity is occurring which results in your monthly target.  You have this level of insight across all functions of your business including marketing, sales, and production.  If you find that not enough has been completed, then you have time to fix it!

Managing your business means regular meetings with those people driving your business objectives of your business plan, but how do you holds them accountable to hitting the targets you’ve set?

You use your operational metrics to hold them accountable, but you won’t have what you need by just reviewing your financials! Find out more reading our blog post Monitoring Business Performance Means More Than Reviewing Your Financials

Results from Managing with Operational KPI’s

Look at the results of clients properly using Tuning Your Revenue Engine in their business have had. It’s not uncommon to see wild positive swings in profitability in just a few months!

“We didn’t even know business self-sustainability was possible for a company of our size.  After applying the small business management model, we increased our monthly revenue by 156% in 16 months.  With the profitability from this growth and by putting the right people and systems in place, we’re discussing how we will spend our retirement from our business  12 months from now, and it will support us for the rest of our life without even having to sell the business!” – Jenn and Mike Rowe, owners, Generations Carpet Cleaning

How to Begin Managing with Operational KPI’s

Using operational KPI's to delegateSystems are at the heart of any good and scalable business. So, to get started you need to understand how your business systematically operates and define the metrics you’ll use to monitor these systems.  The post 5 Steps to Establishing a Repeatable and Sustainable Business contains a good overview of how to create systems and will help you with the process of establishing systems in your business.

Tuning Your Revenue Engine is the Business Growth Simplified tool for establishing your metrics for your business process.  It uses the fundamental functions of any successful business as a roadmap to help you determine the operational KPI’s of any business.  You can use it yourself or hire a DE, Inc. accountability consultant to help you apply it to your business.

So, the question is are you doing enough? If not, why not? Is it that you just don’t know where to start? Use the comments below to post your questions or join our Facebook group to connect with others.

Or don’t you believe this is the right approach for what ails your business? Again, use the comments below to post your questions and concerns.  I am always in search for a better way! So, share if you feel you have one.

The real question is, will you continue to do what you’re currently doing and get less profitability and slower growth than your business can produce?  Or will you take the challenge and do something different.  The choice is yours!

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