What are your KPIs?
Posted on December 18, 2019 by Jay Varcoe, One of Thousands of Business Coaches on Noomii.
Setting goals to improve upon Key Performance Indicators is the single most important tool for small business owners. Do you have a Flash Report?
In my experience, I see too many small business owners “flying by the seat of their pants”. They go through the day juggling so many fires that they do not believe that they have time to plan, evaluate or adjust their process. They just pivot from one crisis to the next. At some point they either finally force their way out of the cycle or they eventually burn out.
One key to moving out of this vicious cycle to get your head above water is to monitor your process and spend less time worrying about the final results. So many small business owners just keep an eye on their bank account balances to judge how they are doing but what they miss is that the bank account balance is a lagging indicator of success. An over-emphasis upon the end result may overlook underlying factors which will eventually lead to your demise. Evaluate your process instead of the result and strive to perfect your process. A bank account can fluctuate for various reasons that are misleading as to how well you are performing. Improve your process and the success will ultimately follow. The best way to monitor your process is by identifying the Key Performance Indicators (KPIs) for your business and keep on top of them. Focusing your efforts toward improving performance related to your KPIs will eventually lead to long term success.
In the restaurants that I have worked with over the past 29 years, the single most important tool for success has been the weekly “Flash” report. The weekly “Flash” report provides restaurant managers with their KPIs to help them evaluate their process and set weekly goals for improvement. Consistent use of the “Flash” report can improve net operating profit margin in a restaurant by 3 to 5% of sales which can amount to doubling profits for some restaurants in what has been referred to as a nickel and dime industry. In the restaurant industry, a profit improvement of just 3% of sales can move a struggling restaurant into the black.
Why is the use of a weekly “Flash” report so successful for restaurants? There are a few factors: 1) a restaurant operating cycle is a week so a weekly report aligns perfectly with the operating cycle, 2) the information is provided on a timely basis because the data is easy to produce (often the day after the end of the week and often the flash may also be used on a daily basis if updated daily), 3) Although there are less than a dozen data figures, the KPIs included in the “Flash” report cover 90% of the process that managers need to focus upon to lead to ultimate success in the restaurant, and 4) the weekly report allows for weekly evaluation of results and appropriate goal setting to improve upon the KPIs for the following week striving for continual improvement in the process.
What are your KPIs? How are you monitoring your process? How do you keep moving toward continual improvement? Every industry can have a “Flash” report. It is the most important tool that you will ever use for your business.
If you would like help identifying your KPIs or setting up an effective Flash report for your business, please let me know. If this concept intrigues you, let’s have a more in-depth conversation about how a Flash report could help your business. I have a 3 month coaching package that can get you up and running with weekly goal setting based upon a Flash report tailored to your business and long term business goals.
Thanks!
Jay Varcoe, CPA, MBA, ELI-MP
“Helping Successful Small Business Owners To Break Through Plateaus”
