How to Track Any KPI in a Small Business

You’re a small business just starting, but you want to make sure you set yourself up for viability and longevity from the beginning. Key performance indicators (KPIs) are a tangible way to visualize how well you achieve your company’s goals. Learn how to track any KPI as an SMB or entrepreneur because metrics aren’t exclusive to Fortune 500s — they are for everyone to become more familiar with their operations, values, and motivations.

Introduction to KPIs

Key performance indicators are ways to quantify progress. It is a strategy for achieving goals and driving innovation. For SMBs, KPIs are relevant and practical metrics that provide oversight and clarity on the company’s standing and trajectory. 

They can measure short- or long-term activity and do not have to be about money. They can be about website traffic, customer satisfaction, productivity, and even carbon footprints. What if you want to measure something that isn’t quantifiable, like an emotional response? This is possible, too. Additionally, you can set customer-focused or internal KPIs separately or simultaneously to ensure a comprehensive scope of your SMB’s execution. 

Tracking KPIs for an SMB is essential, primarily in the early years, when volatility is at its peak. They serve as a guide, letting you know when your motivations might be off-base or if your operational techniques are leading your customers and revenue astray. 

KPIs are also crucial for staying motivated. What’s better than seeing tangible results of your efforts? Your first few years of being an SMB owner will have the most significant learning experiences and learning curves of your career. You will need something to stay afloat mentally and financially — KPIs act as the boat on unsteady waters.

You must set clear goals and expectations to define your KPIs. It’s possible to record metrics that do not serve you, so how do you know what matters and what doesn’t?

Choosing the Right KPIs

Picking suitable KPIs is the most critical decision you will make regarding the growth potential of your SMB. Many companies decide on KPIs that do not apply to them. They research what market competitors measure and think that is the best solution.

Following the wrong numbers leads to a potentially failing organization because you are distracted by the incorrect things. How many KPIs should you have? How do you discover what matters to you versus the top-performing companies in your niche? Unfortunately, there is no single answer to these, as they require the SMB owner to perform self-reflection and potentially brainstorm with stakeholders, mentors, and employees.

However, you can follow goal templates for intelligent KPI tracking. SMART goals are one of the most popular frameworks, focusing on metrics that are:

• Specific
• Measurable
• Achievable
• Relevant
• Time-bound

Start by digging deep into what you want your business values and objectives to be and see if you can translate them into KPIs following this format. That’s when you’ll be ready to move on to the next step.

Establishing a Tracking System

If you thought to track everything on pen and paper, don’t. Countless automated, efficient tools will make KPI tracking seamless and headache-free. Many offer integration with other apps like Excel for visualizing data in any way that appeals to you. Here are some of the most notable KPI tracking software on the market:

• Google Analytics 
• Hive
• Databox
• Scoro
• Domo
• Tableau
• ClickUp
• Smartsheet

Additionally, leveraging software means you have a database of information. Historical data is critical for determining long-term goals, whether it’s about customers or employee performance.

Establishing a tracking system is more than setting up a fancy program. It would help if you also determined your habits concerning that program. How often will you check it? How frequently should you schedule meetings based on these numbers? When a number does not meet your expectations, do you have a written plan for taking action instead of ruminating?

Setting Baselines and Targets

This is the most fun part of KPIs — listing your dream numbers and targets. It’s time to get motivated. First, you should choose the domains you want to focus on. Is it social media or customer satisfaction? Perhaps it’s energy efficiency in your office building or a sales metric. No matter what it is, pick a few to zero in on. Diversifying your attention may leave KPI buckets ignored. It’s best to focus heavily on a few in the short term than many in the long term.

Identify a few baselines. What is the dream goal that might be unachievable? Do you know the number would be nice to reach that will make you satisfied? What number demonstrates regression? Having a few touchpoints instead of only one lofty metric is crucial for contextualizing success while learning how to grow.

You can also execute market research to see how companies in your niche started. For example, Google decided the most relevant KPI was the number of visitors. They stuck with this metric for years, even after failing to hit targets multiple times. They saw yearly increases until the dedication paid off, even though the numbers were not always impressive.

Analyzing and Acting on KPIs

You’ve spent a lot of time drafting how your company should perform and aligning your expectations and values. Once time passes and numbers funnel in, you’ll want to analyze them and make new goals based on the data. Here are mindful questions to ask yourself when reviewing:

• What are my strengths as well as my weaknesses?
• Were there influences outside of my control that influenced outcomes?
• How did competitors measuring similar metrics do? How did I outperform them or not perform as well?
• Can I create a goal based on this KPI, or is it something I should phase out?
• How can I make compassionate improvement plans to stay on track?

It is unlikely you will meet your metrics every time. You shouldn’t. If you meet all KPIs every quarter, you are not ambitious enough. Don’t let the fear of failure prevent you from making assertive plans or pushing yourself against a challenge.

Continuous Improvement and Adaptation

You should review your KPIs often. It is important not to become obsessive, but it is equally vital to understand how frequently priorities change — this is normal. Businesses adapt to the needs of changing clients or global circumstances. Do not be afraid to reassess KPIs because if you pivot, it is often a sign of continued improvement and realizing what’s essential in updating an SMB perspective.

Next year, you may not analyze any of the same metrics, which is fine. Some businesses find focusing on metrics hurts their confidence anyway, harming overall productivity and mindset. If you start to develop this kind of relationship, reevaluate your relationship with numbers and foster a more nourishing relationship with number-based growth.

How to Track Any KPI for Stability and Growth

As you can see, knowing how to track KPIs sets impactful SMBs apart. You want to lean into the relevant numbers to get the most out of them. Choosing arbitrary metrics based on competitors will not do the trick. Ask yourself what triumphs look like in your scope. How can you challenge them with aggressive yet inspiring objectives? 

The future of your SMB awaits you at the end of your analytics dashboard. Let the numbers inspire your confidence to set even more ambitious, meaningful goals for the next quarter.