While financial measures of performance are among the most widely used by businesses, nonfinancial measures can be just as important.įor example, if your business succeeds or fails on the quality of its customer service, then that's what you need to measure - through, for example, the number of complaints received. See the page in this guide on deciding what to measure.īear in mind that quantifiable isn't the same as financial.
These are known as key performance indicators (KPIs). The priority here is to focus on quantifiable factors that are clearly linked to the drivers of success in your business and your sector. One of the key challenges with performance management is selecting what to measure. This puts you in a better position to manage your performance proactively. Knowing how the different areas of your business are performing is valuable information in its own right, but a good measurement system will also let you examine the triggers for any changes in performance. While many small businesses can run themselves quite comfortably without much formal measurement or target-setting, for growing businesses the control these processes offer can be indispensable. Performance measurement and target-setting are important to the growth process. The importance of measurement and target-setting How to set useful targets for your business.Measurement in the manufacturing sector.Measurement against other businesses - benchmarking.Measurement of your financial performance.The importance of measurement and target-setting.
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