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The Best Way to Track Your Company's Performance

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

You need to pick your , or KPIs. They’re data used to chart a 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 flow. But there’s a big : If you choose the wrong KPIs, you may drive your company to financial ruin.

Monty Rakusen | Getty Images

So, how to pick? Identify your and the activities that lead directly to achieving them. Keep in mind that more often than not, bad KPIs are the result of upper 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.)

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