Why is it vital to your business success?
We need to start by understanding what makes your business tick. All too often business owners rely purely on watching their bank balance fluctuate, or their sales levels. We all understand that business is much more complex than that and a huge range of factors can affect a business’ profitability and success. Everything from seasonality to profit margins, stock levels to departmental performance. A combination of these factors, measured as key performance indicators (KPI’s) works – one rarely does.
Measuring these KPIs does more than just help you track past performance, it helps you plan ahead and gives you a baseline for change. You can also start to understand how external factors may or may not affect your performance. Understanding all of these factors will help you build a contingency plan, make changes and in theory, weather any storm.
This management information (MI), combined with your own gut feeling and experience work together to provide you with a powerful feedback loop, allowing you to steer your ship with confidence making small incremental changes where necessary and driving your business forward positively. It puts you in charge of your own destiny.
I often get asked to help businesses set up xero cloud accounting, but conversations quickly turn to this feedback loop and knowing the best factors to measure. If you would like help to find your business ‘tick’, please contact me.