Christiana Mbazigwe, Duric Business Solutions, Toronto, ON, CYBF Mentor
As a business owner or entrepreneur, measurement of business performance is critical for effective and efficient management. You must determine the key performance indicators (KPIs) that will help you set standards as well as monitor and evaluate your business outcomes. This ultimately helps you attain your goals.
For a goal to be SMART, it must be measurable. Business, whether for-profit or not-for-profit, is a game of numbers. Remember that there is a message behind the numbers.
For example, by answering the following questions, you will generate meaningful understanding of a person. What’s your age, height, weight, blood pressure, temperature, shoe size, eye or hair color, etc?
For the business, what are the sales volumes, revenues, expenses, profit per month or year, start-up cost, number of employees, etc? The answers to all these questions provide measures for the management of a particular component of the business. The data derived from the measurements can be summarized in quantitative or qualitative form. The qualitative can be coded and expressed in quantitative form, if desired.
In the non-profit sector, measuring the outcomes of programs and services is crucial to continue receiving funding from sponsors. This requires accurate, timely and up-to-date records of performance. Besides funding, measurement is also useful for effective projection, planning and management of activities.
The same applies to the business sector, where adequate record keeping, measurement and accountability are all imperative. As such, performance measurement is critical for performance management.
In short, “if you can’t measure it [outcomes], you can’t manage it”. And failure to measure and manage your business outcomes will have serious implications on the health of your business. Avoid problems by learning about and implementing performance measurement and management practices today!