Selecting metrics.
THE TEST
Would you act differently if this changed?
If not, do not track it.
WHAT MOST BUSINESSES SHOULD TRACK
Revenue Gross profit Cash position Enquiries and their sources Conversion from enquiry to customer Customer retention
WHY THOSE
They cover income, profitability, liquidity, demand and retention.
WHAT TO ADD DEPENDING ON THE BUSINESS
Stock turnover, for goods Utilisation, for service businesses Average order value, for shops Job profitability, for project work
HOW MANY TO TRACK
Few. Five to eight for a small business.
WHY FEW
A long list is reviewed and forgotten.
A short list is acted on.
WHAT TO AVOID
Metrics that only ever rise Metrics nobody can influence Metrics chosen because they are easy to obtain
WHAT TO REVIEW
Whether each metric has changed a decision in the past year.
If not, replace it.
