Maximising Success: The Power of KPIs in Small Business Growth

Maximising Success: The Power of KPIs in Small Business Growth

Entrepreneurs constantly seek ways to gain a competitive edge and drive sustainable growth in their business. One invaluable tool that has emerged as a game-changer is using Key Performance Indicators (KPIs) strategically. These metrics serve as a compass, guiding small businesses toward success by providing critical insights into their operations’ financial and non-financial aspects.

The Significance of Financial KPIs

Financial KPIs are paramount for businesses as they serve as a compass, guiding strategic decision-making and ensuring sustained economic health. These metrics offer quantitative insights into a company’s fiscal performance. Understanding and optimising financial KPIs is crucial for a business to thrive and grow. These metrics provide a snapshot of current financial standing and aid in forecasting, budgeting, and resource allocation. They enable businesses to identify areas of inefficiency, refine pricing strategies, and allocate resources effectively, ultimately contributing to increased profitability and long-term financial sustainability.

Examples of Financial KPIs include: 

Revenue Growth Rate

One of the fundamental financial KPIs for small businesses is the Revenue Growth Rate. This metric assesses the percentage increase in revenue over a specific period. For small enterprises, tracking this KPI is essential for understanding the effectiveness of their sales and marketing efforts. It enables businesses to identify successful strategies, allocate resources wisely, and make informed decisions to drive further growth.

Profit Margins

Profit Margins are crucial indicators of a small business’s financial health. By calculating the profit percentage derived from sales, entrepreneurs gain insights into their operational efficiency and pricing strategies. Monitoring gross, operating, and net profit margins allow businesses to adjust their cost structures and pricing models to maximise profitability.

Cash Flow

Small businesses often face cash flow challenges that can hinder their day-to-day operations. Keeping a close eye on Cash Flow KPIs is imperative to ensure sufficient liquidity for meeting expenses, paying suppliers, and investing in growth opportunities. Businesses can implement proactive measures to maintain financial stability by identifying patterns and potential cash flow bottlenecks.

Return on Investment (ROI)

ROI is a critical financial KPI that measures the profitability of investments made in various business activities. Whether it’s marketing campaigns, technology upgrades, or employee training, understanding the return on these investments helps small businesses allocate resources to initiatives that yield the highest returns, thus optimising their overall performance.

Beyond the Balance Sheet: Non-Financial KPIs

Non-financial KPIs play an equally crucial role, offering a holistic perspective on a business’s overall performance beyond the balance sheet. They can provide qualitative insights that are equally vital for success. Tracking non-financial KPIs allows businesses to understand the intricacies of customer experience, employee satisfaction, and market responsiveness, fostering a comprehensive strategy for sustained growth and competitive advantage. Both financial and non-financial KPIs are indispensable tools for businesses aiming not just to survive but to thrive in an ever-evolving business landscape.

Examples of non-financial KPIs include: 

Customer Satisfaction

Happy customers are more likely to become repeat buyers and brand advocates, contributing significantly to a small business’s long-term success. Regularly assessing customer satisfaction through surveys, feedback, and reviews provides actionable insights for improving products, services, and overall customer experience.

Employee Productivity and Engagement

Small businesses thrive when their teams are engaged, motivated, and productive. Employee Productivity and Engagement KPIs help entrepreneurs gauge the efficiency of their workforce. Tracking project completion rates, employee satisfaction surveys, and turnover rates empowers businesses to create a positive work environment, enhance productivity, and retain valuable talent.

For some practical tips on boosting staff productivity, check out our article.

Website Traffic and Conversion Rates

In the digital age, an online presence is indispensable for small businesses. Monitoring Website Traffic and Conversion Rates provides insights into the effectiveness of online marketing efforts. By analysing user behaviour, small businesses can refine their digital strategies, optimise their websites, and convert more visitors into customers.

Time-to-Market

For small businesses, agility is often a critical competitive advantage. Time-to-market KPIs measure the speed at which a product or service is brought to market. Rapid innovation and quick response to market demands enable small businesses to stay ahead of the competition, capture new opportunities, and adapt to changing customer preferences.

Implementing a Successful KPI Strategy

Businesses must adopt a systematic approach to harness KPIs’ full potential.  

Identify Relevant KPIs

Not all KPIs are created equal. Small businesses should carefully select KPIs that align with their goals and objectives. Whether financial or non-financial, each chosen metric should provide actionable insights into critical aspects of the business.

Set Clear Goals and Targets

Establishing clear goals and targets is essential for KPI effectiveness. Small businesses should define what success looks like and set measurable targets for each selected KPI. This ensures that the metrics are aligned with the overall business strategy.

Utilise Technology for Tracking

Leverage technology and analytics tools to automate the tracking and monitoring of KPIs. This saves time and provides real-time data that can be invaluable for making timely and informed decisions.

Regularly Review and Adjust

Business environments are dynamic, and small businesses must adapt to changes swiftly. Regularly reviewing KPIs allows entrepreneurs to identify trends, make informed decisions, and adjust strategies to stay on course towards their goals.

We have compiled a list of more examples of both financial and non-financial KPIs that you could use in your business in our Know Your Numbers workbook. Get your copy here.

The strategic use of Key Performance Indicators is a powerful tool that goes beyond mere financial tracking. By incorporating financial and non-financial KPIs into their decision-making processes, entrepreneurs can gain a holistic view of their operations, optimise performance, and foster sustainable growth. As small businesses continue to navigate the complexities of the modern marketplace, embracing the power of KPIs is not just a choice but a strategic imperative for success.

Smart Savings: How To Cut Costs and Boost Success

Smart Savings: How To Cut Costs and Boost Success

In today’s fast-paced business world, finding ways to reduce expenses while maintaining quality is crucial for long-term success. Cost-cutting strategies can significantly impact your bottom line and allow you to allocate resources more efficiently, ultimately enhancing your business’s success.

Here are some practical and straightforward tips businesses can implement to reduce costs effectively. 

Embrace Technology for Efficient Operations

Investing in the right technology can streamline your business operations and reduce costs in the long run. Look for software and tools that automate repetitive tasks, manage inventory efficiently, and enhance productivity.

Some of our favourite tools include: 

  • Dext for automating accounts payable and saving time with bookkeeping, and it means you don’t have to keep paper.
  • Zapier for integrating software that doesn’t otherwise talk to each other, for example, adding new people to your email list when a lead is generated.  
  • Office suite – we are MS Office users here, but you can achieve the same with Google. Having a calendar that is shareable and accessible from all devices, being able to chat with the team and storing all documents in one place are standard features and big time savers.

Negotiate with Suppliers for Better Deals

Developing solid relationships with your suppliers is crucial. Regularly review your agreements and negotiate for better terms, discounts, or bulk purchase deals. This helps reduce costs and fosters collaborative partnerships that benefit both parties in the long term.

If your suppliers will not come to the party, shop around.  

We recently worked with a client to shop around on a particular subset of their materials, resulting in a 35% saving!  

We also recommend doing a supplier due diligence. If you rely on a particular supplier, you must ensure (as best as possible) that they will be around for the long term.  

Optimise Energy Consumption

Energy bills can be a significant expense for businesses. Implement energy-saving practices such as turning off lights and equipment when not in use, investing in energy-efficient appliances, and considering renewable energy sources. This not only reduces costs but also demonstrates your commitment to sustainability.

Another consideration is the time of day you use appliances. For example, using off-peak times to charge batteries and run machinery. This, however, must be practical and not cause any issues with production or productivity.  

We recommend implementing this in addition to other sustainable initiatives like being a paperless office and recycling where possible.  

Check out one of our early blogs here about why you should care about being a sustainable business.

Review Telco Invoices

Telcos have been notorious for lock-in contracts and constantly changing plan inclusions. Scrutinise your phone and internet bills, ensuring that you are on the best deal for your business needs. Telecom providers regularly update their plans, and by staying vigilant, you can identify opportunities to optimise your services while reducing expenses. 

While negotiating with your provider for better rates might be impossible, explore bundled services and consider alternative providers offering more competitive packages. 

GAP founder Susan has previously worked in the telco industry and can attest that mobile plans (in particular) must be reviewed regularly. Ask yourself, do you really need that data inclusion when you have wifi at work and home? A $10 monthly saving per plan soon adds up! 

Invest in Training and Development for Employees

Investing in the training and development of your existing workforce can lead to increased efficiency and productivity, ultimately reducing costs. Well-trained employees are better equipped to handle tasks with accuracy and speed, minimising errors and the need for rework. This strategy can also contribute to employee satisfaction and retention.

If any of your staff need some extra training with any finance-related tasks, please reach out. We offer personalised and tailored training sessions.

Conduct Regular Financial Audits

Regularly auditing your finances helps identify areas where you can cut costs and improve financial efficiency. Track your expenses, review your budgets, and eliminate unnecessary expenditures. This proactive approach ensures that you stay on top of your financial health and can make informed decisions to enhance your business’s success. 

Adopting smart cost-cutting strategies is essential for success in the business landscape. By embracing some of these tips, your business can thrive and be more financially sustainable. Remember, it’s not about cutting corners, but about making informed decisions that contribute to the long-term success of your business.

The Magic of Delegation: How an OBM Can Be Your Business’s Secret Weapon

The Magic of Delegation: How an OBM Can Be Your Business’s Secret Weapon

This guest blog is bought to us by Meredith Nowlan from The Regional OBM.

Are you ready to take your business to the next level and know that you need a hand to do it? Perhaps you’ve just signed up with a business coach or a virtual CFO and they’ve given you an action list that’s as overwhelming as it is invigorating. Well, I’ve got some great news for you. I’m going to dive into the wonderful world of Online Business Managers (OBMs) and how having one can positively impact your business. So grab a cup of coffee, sit back, and let’s explore how an OBM can work wonders for your business.

Streamlined Operations and Processes

Picture this: you’re running your business and it’s gaining momentum. It’s freaking amazing, but sometimes the day-to-day operations can get a little stressful/time-consuming/all-encompassing (insert your own experience here!). 

Enter the OBM, your wing woman in business. These magical beings specialise in optimising and streamlining your business operations and processes. From creating efficient workflows to implementing systems that make your life easier, an OBM will have your business running like a well-oiled machine.

Strategic Planning and Goal Setting

Remember the coach or new CFO I mentioned earlier? They’ve clued into the fact that you’ve got big dreams and even bigger goals. Sometimes, it can be challenging to turn those dreams into reality, even with the awesome assistance they’re giving you. That’s where an OBM comes in. Share your goals with her and every plan that she makes will help you navigate towards the desired end result. Your regular catch up’s will turn into brainstorming sessions on the best way forward – and she’ll love it just as much as you do.

Delegating and Managing Teams

As a small business owner, you wear many hats. And there are days where trying to juggle all the tasks can leave you feeling like a one-person circus act. So don’t let fear hold you back! An OBM is here to protect your sanity. They’re masters at delegating and managing teams. They’ll help you build a dream team of talented individuals and ensure everyone has the tools they need to work seamlessly. This particular OBM is not afraid to employ tech stacks where necessary – automagic is just a few key strokes away! With an OBM on your side, you can focus on what you love and let them handle the rest.

My tip – a project management system such as Trello, ClickUp and Asana can really make an impact on getting started with the first 3 topics!

Enhanced Customer Experience and Satisfaction

Having a kickass customer journey and customer service can be the difference between you and your competition. Happy customers mean repeat business and positive word-of-mouth, and that’s pure gold. This process should be a well-oil machine that cranks every single time – no matter which team member picks up the order or how many after-school activities you are actively ubering this week. An OBM can work with you to implement customer-centric strategies and processes that will leave your customers smiling from ear to ear.

Dubsado is the client relationship management system I utilise inside my own business and recommend most to my clients! 

Time and Stress Management

I get it. Running a business can feel like a never-ending rollercoaster ride, especially when you throw in family and community responsibilities (or just trying to get to the pub for dinner on Friday night to remind friends you still live). It’s exhilarating, but it can also be exhausting. An OBM is like your personal time and stress management guru. They’ll help you reclaim your precious time and alleviate stress by handling operational tasks. So take a deep breath, relax, and enjoy a better work-life balance. You deserve it!

When an OBM is not for you

If you aren’t ready to implement change, hand over partial control of the reins or really don’t want suggestions on how to improve your systems, communication and automations… then what I’d suggest is looking into a Virtual Assistant (VA). VA’s are more than happy to follow a set checklist to help you manage the day-to-day. Whilst many of them are happy to think outside the box, they understand that it’s not what they’re here for and will gladly follow your lead. There’s nothing wrong with being at this stage – so long as you aren’t sitting stagnant out of fear of what could come next!

How to start with an OBM

If you are wondering how to start with an OBM, the first step is booking a discovery call! In this first session, we’ll chat about what’s going well in your business and where you are struggling with keeping up, maintaining control and what systems need a good tightening. Understanding what systems and software you’ve in place already gives me a great idea of where you need to head next to achieve the vision you have for your business. 

An OBM is a game-changer, offering streamlined operations, strategic planning, team management, automation wizardry, enhanced customer experiences, and stress relief. So why wait? Embrace the benefits bringing on OBM onboard will bring – you won’t look back! 

About Meredith

Meredith Nowlan is a Systems Strategist and Online Business Manager with extensive experience in the logistics, mining and transport industries. She’s worked in almost every role an office could have and considers herself the ultimate wing woman in the business world. From kickstarting your Dubsado setup to creating streamlined systems and automations across various apps, Meredith has your back when it comes to sprinkling auto-magic over your business. Based in FNQ, Meredith works remotely with business owners from all around Australia (some from their caravans!) to ensure their businesses run like a well-oiled, efficient machine that frees up your time and skyrockets your success.

Book a discovery call with Meredith Nowlan from The Regional OBM, or connect with her on LinkedIn.

Follow The Regional OBM on Instagram and Facebook for more helpful tips.

Unlocking Business Success: The Importance of Strategic Planning and Budgeting

Unlocking Business Success: The Importance of Strategic Planning and Budgeting

Strategic planning is pivotal in determining long-term success in the fast-paced and competitive business world. By setting clear goals and developing actionable strategies, businesses can navigate challenges, seize opportunities, and drive growth. 

The Power of Strategic Planning

Strategic planning defines a company’s vision, objectives, and actions to achieve them. It provides businesses with a roadmap, guiding their decisions and ensuring alignment with long-term goals. We believe strategic planning is crucial for the following:

Direction and Focus

A well-defined strategic plan sets the path for the business. It clarifies the company’s purpose, values, and desired outcomes, keeping everyone focused on a shared vision. With a clear direction, businesses can make informed decisions and allocate resources effectively.

Anticipating Change

Strategic planning enables businesses to anticipate and adapt to changes in the market, technology, and consumer behaviour. Businesses can identify potential threats and capitalise on emerging opportunities by conducting thorough market research and analysing industry and business trends.

Resource Optimisation

Effective strategic planning helps businesses optimise their resources. By aligning objectives with available resources, companies can allocate funds, personnel, and time more efficiently. This ensures that resources are utilised in the areas that provide the greatest value and support achieving strategic goals.

Risk Mitigation

Strategic planning involves assessing potential risks and developing contingency plans. By identifying vulnerabilities and implementing risk mitigation strategies, businesses can proactively address challenges and minimise their impact on operations and profitability.

The Role of 3-Way Budgeting in Strategic Planning

An essential component of strategic planning is 3-way budgeting. We believe that 3-way budgets underpin strategic plans:

Financial Visibility

3-way budgeting provides a comprehensive view of a business’s financial health. Businesses gain insights into their financial performance by integrating revenue projections, expense forecasts, and cash flow estimates. This visibility enables informed decision-making and facilitates allocating resources to support strategic objectives.

Goal Alignment

3-way budgeting ensures financial goals align with strategic objectives. By integrating financial targets into the planning process, businesses can evaluate the economic feasibility of their strategies. It helps identify the financial impact of various initiatives, such as product development, market expansion, or cost optimisation.

Performance Evaluation

3-way budgeting allows businesses to monitor and evaluate their financial performance against established targets. By regularly comparing actual results with budgeted figures, businesses can identify areas of improvement, adjust their strategies, and make informed decisions to stay on track towards their goals.

Failing to plan is planning to fail

Benjamin Franklin

These wise words from Benjamin Franklin are a powerful reminder of the significance of planning in achieving success. By taking the time to strategise, set goals, and create actionable plans, businesses can position themselves for growth and overcome obstacles.

Strategic planning is integral to building a successful business in the Australian market. It provides direction, anticipates change, optimises resources, and mitigates risks. Additionally, 3-way budgeting underpins strategic plans by offering financial visibility, aligning goals, and evaluating performance. So, remember the wise words of Franklin and prioritise strategic planning to unlock your business’s full potential and thrive in today’s competitive landscape.

Book a discovery call today if you need help with your strategic plan and/or 3-way budgets.

You can also read more bout setting goals here.

Top tips and methods for setting goals

Top tips and methods for setting goals

Setting goals is essential in life and business as they provide you with direction.  Several people lately have said that they struggle with setting goals, so we have put together a list of our top tips and methods for setting goals.  

Method 1 – SMART Goals

smart goals

The SMART criteria has been around since the early 1980s and is the optimal way to set goals.  

Specific – A specific goal should answer questions like what needs to be accomplished?  Who is responsible for it?  

Measurable – Quantifying your goal, it allows you to track your progress and give you a measure of success.  

Achievable – Is your goal achievable?  Goals should be a challenge or a stretch from where you currently are but they also should be attainable.  

Realistic – Is your goal realistic?  Having unrealistic goals can create unwanted stress and frustration.

Timely – In what time period are you going to achieve your goal? 

An example of a weak goal is “I want to increase my monthly customer retention rates”.  However this can be made into a SMART goal “I want to increase my monthly customer retention rate by 10% in the 6 months from February”.  

Method 2 – PACT goals

PACT goals focus more on the output.  Some people have found that PACT goals allow them to track progress towards achieving a goal and creating new habits. The PACT technique works especially well for long-term, ambitious goals because they are focused on continuous growth.

pact goals

Purpose – A purposeful intent speaks to your values and vision for the future.  

Actionable – Your goals should have outcomes that you can focus on now.  Actionable steps allow you to be present and not just planning to do in the future. 

Continuous – This is where you can focus on continuous growth and improvement towards your goals. By using repeatable and straightforward routines, it helps you to avoid analysis paralysis and build healthy habits.  

Trackable – This is more of a “yes” or “no” approach – tracking whether or not you’ve completed the actions you needed in order to achieve your goal.

An example of a PACT goal is “I am going to email 15 and call 5 existing customers each week for 6 months with the specials to increase the monthly customer retention rate by at least 10% from February.  

Tip 1 – Write your goals down

Writing your goal down helps you clarify them, particularly if you are following one of the methods above.  A US study showed that you are 42% more likely to achieve your goals if you write them down.

But don’t write them in a notebook that you’ll never look at again.  Keep them handy and refer to them regularly.  Your goals should influence your decision-making.  

Tip 2 – Break down the steps

If you have used the SMART methodology, you may need to break your goal down into steps or even subgoals to allow you to achieve it.  For example, if you want to run a marathon you don’t just go out and run one.  You need to break down the steps first.  The steps could be hiring a running coach, buying new shoes, eating a particular diet, running 5 days a week, and competing in a 10K race.  All of these are steps that are going to allow you to run a marathon.  

Business goals are exactly the same.  Your goal could be that you want to achieve a million dollars in sales for the year.  Some of the steps you may need to complete could include preparing a budget (read why every business should have a budget here) and a marketing plan, reviewing your manufacturing processes, hiring a new team member etc.  

These steps can be both internally focused as well as customer or externally focused, but they all should be helping you to achieve your overall goal.

If you need some help with your business goals, book a discovery call with us.