Why KPIs and Metrics are important.
Key Performance Indicators are essential to defining how your business is working.
There are a few reasons for this:
- If you don’t measure results you don’t know how well you are doing, or how well you are achieving your wealth, freedom, and impact goals.
- Business is a series of experiments: you will try new things, see how they work, and make adjustments. The only way you know whether anything has worked is with metrics. Without metrics, you end up blindly guessing, trying things, seeing what works, and burning through cash.
- Metrics tell you where you need to invest and add work.
- They are important for performance reviews: you want your performance reviews to be about more than what you feel about a situation.
What we cover in this section
We will help you create financial and operational KPIs as a part of your financial reports package, but there we will talk about how to interpret the financial KPIs and introduce other metrics for marketing and management.
This section will evolve as we add content.
Your objectives for this section
- Use this section as a reference to understand your KPIs.
- Identify what KPIs and scorecards you need.
- Use the templates as a basis for your KPIs/Metrics.
A note on the colors we use
Not all systems allow us to use the same colors in scorecards. However, we do have a methodology we like to use and use these color cues wherever we can. This video explains our color coding: