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Finding Your Metrics: KPI Examples
Key Performance Indicators (KPIs) provide a quantifiable metric by which a company is able to reliably gauge its success. KPIs offer a company something to shoot for: a way to achieve continuous improvement. Of course, just as every company is different, every company's leading KPIs may also be different. Which KPIs are most relevant to the organization depends on industry and the size of the business.
For startups, some of the most important types of key performance indicators include:
Together, these KPIs will give a startup information about how fast it's growing — as well as how long it will be solvent. These KPIs won't just show a company whether it's improving and growing, but it will form the foundation of the company's decision-making process.
Consider the following interactions between burn rate, revenue, and users:
While there can be an instinct to start tracking absolutely everything, it's important that KPIs be simple. Only a few KPIs should be emphasized by a company's strategies, because a simpler set of KPIs means a more focused and structured business. Of course, this also puts the emphasis on selecting the best KPIs, and tracking them as accurately as possible.
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Tracking Your Sales KPIs
General KPIs are used for board members and key stakeholders, but each department within a business will also have their own KPIs to track. Sales departments will usually be tracking primarily revenue and operations. A good KPI for sales should be measurable, accurate, and able to be influenced by the sales team.
A few of the most important sales KPIs include:
These KPIs are the ones that are most important to the sales department. For instance, a sales department might see that their monthly sales numbers have risen, but the average cash value of their sales has gone down. That indicates that the department is getting conversions, but that they should be seeking to upsell on their sales. A sales suite may be used to automatically reveal the KPI meaning in sales reports, as many sales suites include analysis solutions.
Setting Employee KPIs
One important aspect to KPIs is that they can be customized and tracked on an individual basis. Key performance indicators for employees may reveal which employees are performing the best, and which employees may require additional training or resources. While KPIs don't always tell the complete story, they are an excellent way for a company to get a broad overview of employee performance.
To better manage employees, companies can:
These KPIs can be used for a Key Performance Indicators Employee Evaluation, through which an employee's performance is discussed and explored with them. Often, employees may not realize that their work product has slipped, or they may need additional help and training. If an employee is doing particularly well, acknowledgment and rewards will be key to keeping their outcomes high.
Key Performance Indicators are extremely valuable methods of determining whether a company is operating successfully or not. By adopting the right KPI strategies, you can control the direction of your business and its employees moving forward. With the wrong KPIs, you may find your company chasing its own tail.