My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

Ask the Money Guy

The Best Way to Track Your Company's Performance

The Best Way to Track Your Company's Performance
Image credit: Monty Rakusen | Getty Images
Magazine Contributor
1 min read

This story appears in the May 2016 issue of Entrepreneur. Subscribe »

You need to pick your key performance indicators, or KPIs. They’re data used to chart a business on its way to success and profits, and are often used when revenue-starved startups need to identify ways to measure progress in the absence of cash flow. But there’s a big risk: If you choose the wrong KPIs, you may drive your company to financial ruin.

So, how to pick? Identify your business goals and the activities that lead directly to achieving them. Keep in mind that more often than not, bad KPIs are the result of upper management and the board deciding what to track. In my experience, you’re better off listening to line managers and frontline employees; they’ll give you more granular KPIs, to truly show how your company is doing. (See chart below for some starter ideas.)

Once you have your KPIs picked out, lock in the time period for each one to be measured. The goal is to monitor change as close to real time as possible (I suggest weekly) and hold people accountable for improvements.  

More from Entrepreneur

New York Times bestselling author Nicole Lapin can help you pitch your brand to press and strengthen your media training.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur