As a business owner, you are likely to monitor several key performance indicators (KPIs) to determine how well your company is doing. Whether it is financials, advertising, turnover, or website traffic, metrics can be a great way to measure and improve a business’s growth. However, a few metrics are critical to a company’s long-term success that many business owners—especially entrepreneurs—fail to track. In this article at Forbes, the author shares some overlooked KPIs that all entrepreneurs must track.
KPIs that Matter
Cash Conversion Cycle
One frequently overlooked financial metric is the cash conversion cycle (CCC). This metric tracks how quickly a customer pays you. As an entrepreneur, you can compare this metric with how long it takes you to pay your suppliers. Generally, the lower the number of CCC, the better it is for the company. To achieve this, you must have an incredibly efficient inventory system and flexible terms for your suppliers and customers that use speedy payment options.
Customer Lifetime Value
Customer lifetime value, often known as LTV, is one of the most critical business metrics that you must track. “This helps you understand how long you are keeping customers and how much they are spending with you,” says the author. By analyzing and improving the relationship with your existing customers, you can increase your revenue by 50-100%.
Impressions are mostly underrated. In fact, most entrepreneurs are less concerned with impressions. However, you can build a brand or a loyal customer base only through continuous and persistent impressions of your products, services, or reputation.
Profit Per Employee
Employee productivity impacts your business’s overall operational efficiency. That’s why business owners should be familiar with the profit per employee formula. By investing in better technology or skilling up your employees, you will undoubtedly increase your profit per employee and become more efficient.
To read the original article, click on https://www.forbes.com/sites/theyec/2021/06/16/eight-overlooked-but-important-kpis-all-entrepreneurs-should-track/?sh=1cc4a8df4ae3.