KPIs. The Power of Information

Want to know what's the best way to improve your business?

Easy! Your business will tell you!

No one else will.

How do you listen to your business?

By understanding your business numbers and extracting information from them.

In this newsletter we will explain some terms and solutions that will clear the fog.

In subsequent newsletters we will explain how to do some of the things mentioned here.

Over the last few years I have met many solopreneurs and small business owners who know that something is not working with their business, but are at a loss to understand what it is. So they try everything - a new website, marketing ads, you name it - without knowing what's really going on.

It's like a doctor giving you pills without any kind of analysis.

Sure, some of them will help.

Once you understand what's going on, one of these options might become your strategic solution.

You just don't have to try them all first.

Your business already knows what's wrong.

You just need to learn how to listen to it.

The language you need to speak is Business Intelligence.

The buzzword is KPI!

Key point # 1: Is Information the Same as Business Numbers?

No. By business numbers, we mean the row values - numbers and text - stored on the platforms your business uses.

For example,

• The Excel spreadsheet with all your purchases and customers,

  
  

• the email list for your newsletter, with account details for each email, such as their interests, age, and so on

  
  

• the list of items in your stock.

  
  

All the above examples are row data.

An information is a value that combines or transforms them.

• From the list of purchases we can get information about who is our best customer.

  
  

• From the account details we can get information about our customer persona, their interests, age, and so on.

  
  

• From the list of items in your inventory, we can get information about which items need to be restocked, how fast they're being restocked, what the life span of your items is.

From Business Numbers to Information

Key point # 2: So what is a KPI?

The Key Performance Indicator(s) is a value, or set of values arranged on a graph or chart, extracted by manipulating the business numbers.

KPIs are a kind of information. The goal-oriented kind.

KPIs describe what's going on in your business.

So they are the values to look for and extract by manipulating your business numbers.

Sometimes this is already done for you. Every single platform has an automated dashboard - a web page with numbers and graphs that are generally meaningful to most users of that platform. With a bit of skill, you can add your own customisations.

If you don't have any of that, say you only have Excel files, you can also put all the KPIs in one place so they're easy to check. This is the dashboard.

“If you cannot measure it, you cannot improve it.” – Lord Kelvin

Key point # 3: Not all KPIs are Created Equal

I can already imagine some people reading this post and starting to google what the KPIs are for this or that type of business.

There are hundreds of KPIs out there.

It's important to choose the ones that are relevant to you and your business. It's important to decide, while remembering that which KPIs are useful may change as time goes on.

Your business will change and so will your understanding of it.

Key point # 4: What are the Insights?

What you really want are insights.

An insight is an understanding of what's going on.

So you have information through KPIs. Put them all together and you've got insights.

Key point # 5: Insights are What you Want, but the KPIs are What you have to Get.

Your strategy will be based on your business insights.

Your business insights come from your KPIs.

So your first step is to decide what KPIs you want to get.

If you just google "what KPIs to check" you will get an endless list of generic KPIs. Will they be useful for YOU? Who knows.

We have developed a 3-step decision-making roadmap to help you choose which KPIs are really useful for your business and strategy.

It's coming in the following newsletters, so click on subscribe so you don't miss out - or keep checking our website.

I hope this has clarified the link between business numbers, KPIs and business insights.

Business insights give you the knowledge you need to plan your business strategy.

To get more out of your business.

To get more for you.