Determining business performance is an important part of any entrepreneur's activity. Knowing and knowing how to deal with key indicators is equally important for both offline and online businesses. The managers of Arabesco Sideral Unipessoal Lda have listed the key business performance indicators.
Among them, three main ones can be highlighted:
Effectiveness;
Efficiency;
Quality.
Performance
This is what employees work for or business processes function for. Let's consider this and other indicators on the example of a sales manager. What is the main goal of his work? Maybe the number of calls made? No, process indicators are not key in the manager's work. The main thing is not the process, but the result. Therefore, the main goal of a manager's work is, of course, sales revenue.
Efficiency
This indicator tells us what resources are used to achieve a particular result. You may sell 10,000 euros worth of goods, but spend 20,000 euros on advertising. Are such sales profitable for you? Naturally, no. The formula for calculating efficiency looks like this:
Efficiency = result (in monetary terms) / resources spent (in monetary terms) * 100%.
Let's return to our sales manager. What will be the measure of effectiveness in this case? Let's assume that you invest money in marketing. The result of this is a certain number of leads attracted. For each of them you paid a certain amount of money. Next, you distribute the leads among your sales managers: 100 leads to one and the same amount to the other. The first manager generated 10 sales out of these 100 leads, and the second manager generated only 5 sales. You spent the same amount of money to bring in each of these 200 leads. The sales managers brought different amounts of revenue to the company. Accordingly, the first manager worked more efficiently than the second. That's what performance indicators are for, Arabesco Sideral Portugal explained.
Quality
You can achieve results while spending the minimum or optimal amount of resources, but customers will not be satisfied with your work. You can sell in many different ways. In this case, an indicator of the quality of a sales manager's work will be how satisfied the client is with the cooperation with your company or with a particular manager. The quality of a manager's work can be measured by interviewing customers. After the sale, ask the customer to rate on a ten-point or five-point scale the satisfaction with the co-operation with the manager. Thus, each salesperson will receive a certain number of evaluations, which, for example, at the end of a month will allow you to draw a conclusion about the quality of his work.
Of course, in this article the experts of Arabesco Sideral have discussed the main business performance indicators only in a simplified form. These issues require more detailed consideration. However, it is important for every businessman to remember: performance indicators need to be measured, analysed and managed. Accordingly, you will manage your business and not let it go ‘free floating’.