(703) 277-7700 [email protected]

Which KPIs are You Tracking?

Small businesses should track their key performance indicators (KPIs) on a regular and consistent basis, typically monthly or quarterly. Tracking KPIs monthly allows you to quickly identify any negative trends or issues and take corrective action before problems escalate.

Financial KPIs

1. Net Profit: A simple measure of total revenue minus expenses to gauge overall profitability.[1][2][3]

2. Net Profit Margin: Net profit as a percentage of revenue, indicating efficiency.[1][2][3]

3. Gross Profit Margin: Revenues minus cost of goods sold, showing profitability of sales.[1][3]

4. Revenue Growth Rate: Percentage increase/decrease in revenues over time.[4]

5. Cash Flow: Monitoring cash inflows and outflows for liquidity.[4]

Customer KPIs

6. Customer Acquisition Cost (CAC): The cost of acquiring each new customer.[3][4]

7. Customer Lifetime Value (CLV): Projected revenue from a customer over their lifetime.[4]

8. Customer Satisfaction (CSAT): Measuring customer happiness and loyalty.[4]

Operational KPIs

9.Employee Retention Rate: Percentage of employees remaining over a period.[2][4]

10. Accounts Receivable Days: Time taken to collect payments from customers.[1]

The key is to select a mix of leading (predictive) and lagging (output) indicators that align with your specific business objectives and strategy.[3] Start with around 5 high-priority KPIs and build from there, regularly reviewing their relevance.[2][3]

While monthly and quarterly reviews are most commonly advised for high-level KPIs, small businesses should determine the appropriate tracking cadence for each KPI based on its importance and how frequently the underlying data is available and actionable.