In running any company, it’s important to set specific goals and objectives. In business, this is often called a KPI, or key performance indicator. At TFO Solutions, located in the Dallas/Fort Worth area, we work with our clients to help them discover what their KPI goals are and how best to achieve them.
What is a KPI Goal?
More specifically, a KPI is a measurable value that helps companies evaluate if they are reaching their objectives. KPIs may be high level, looking at how the business is performing as a whole, or low level, specifically targeting certain departments including sales, human resources, or marketing.
Regardless of which, when setting these goals, it’s important that there is a definitive understanding of the objective, a plan of action on how to achieve them, and a clear delegation of who can help attain each KPI.
What Are The 5 Key Performance Indicators?
There are several types of key performance indicators, some of which are specific to the type of business you are running. Below, however, are five KPIs that are universal for all companies to use:
1. Growth of Revenue
Though obvious, it is a great indicator of the success of any company. The goal should be to aim for positive growth as negative growth indicates a problem with the business plan or model.
2. Sources of Income
Sources of income should be regularly analyzed, looking particularly at each client and the service they utilize. Doing this identifies profitable customers and can highlight specific ways to encourage growth within the business.
3. Revenue Concentration
Another important KPI relates to sources of revenue and ensuring it’s not coming from too few clients. When this is the case, losing just one client can be detrimental to your monthly income. Changing your market strategy and ensuring you have a diverse client portfolio can protect your company and keep several sources of revenue active at all times.
4. Working Capital
Working capital is another important KPI. Knowing where to get money if or when you need it enables you to tackle a large project, or just keep your company afloat should clients not pay their invoices right away.
5. Profitability Over a Period of Time
Regularly evaluating expenses is another great KPI goal. Not only does this show where financial resources are going, it also helps in making several decisions, including:
- Where to cut costs
- How much to raise prices to increase profit
- Which higher-paying clients or prospects to focus marketing dollars on
How TFO Solutions Can Help
In running a business, it can be hard to know where or how to begin setting guidelines and key performance indicators. Fortunately, at TFO Solutions, we are experienced professionals that know the right questions to ask to determine your company objectives. Hiring our team means that we help you define your KPIs, create an action plan to get there, and even help you evaluate your performance along the way.
Contact Us Today!
So, if you’ve been looking for a team near you to help organize and create structure around your company, it’s time to give TFO Solutions a call. We look forward to showing how our goal-setting strategies can set your business up for success!