To successfully manage a business, you need more information than just your sales figure and profitability.
One of the key sets of information that you can have is “metrics”.
Metrics enable you to track, monitor and assess the success or failure of various business processes. This will enable you to identify your firm’s progress to achieving your objectives, both long-term and short-term, which might not be evident from just reviewing your profit and loss account.
Metrics can incorporate KPIs as well as many other aspects of the business operation, which might not be reflected in the financial terminology to which KPIs normally relate.
Metrics are numbers that measure your performance. There are 3 kinds of metrics: long-term, short-term and financial health.
Metrics suitable for most businesses include the following:
Financial Health Metrics:
Comparison of your financial performance to similar businesses through a benchmarking process
Companies that are committed to “scaling up” need the data produced by metric evaluations of the company’s performance to guide the leadership team.