Choosing the right key performance indicators (KPIs) for your business will make all the difference in your ability to determine how your business is growing, what steps should be taken in measuring growth, how to improve, where to trim the fat, and everything in between. Here are some essential KPIs to take into consideration when deciding which KPIs mean the most to your business, based on industry standards and trends, goals, and many other factors. 

Net Profit

Many companies mistakenly attribute too much weight to their gross profit margin instead of net profit margin. The difference between the two - taxes and expenses - can be huge if you don’t know how to reduce your liabilities. Much of the profit in business happens on the supply side, especially for the SMB market, and net profit is a much better metric for you to use.

Net profit = revenue - expenses

Current Ratio

Your current ratio represents your ability to pay your liabilities. It can be calculated like this:

Current ratio = assets/liabilities

In most industries, your current ratio should be between 1.5 and 3. If the ratio is less than 1, then you likely do not have enough money to pay off liabilities. If you track this indicator in real time, you may be able to cut off any cash flow problems before they become a huge problem.

Aging Accounts Receivable

If you bill a large number of customers as routine business, then you can find some of the causes of cash flow problems through an aging accounts receivable metric. This KPI will tell you if you have a contingent of customers who are stretching out their payments too long. If this is the case, you may be able to shore up your cash flow problems by charging interest on accounts that are long overdue, or you may choose to completely stop doing business with those clients under certain circumstances.

Company Followers Change Rate

Social media is becoming a more important part of every business, and the followers that you have on your chosen social media platforms can serve you well if properly utilized. They can also serve as a measure of how well your marketing strategies are being received. However, instead of total followers, a better KPI is the change rate of followers. People will leave and join your network routinely, but if you note a huge jump in followers or in unfollows, then you have probably done something that needs to be repeated or stopped immediately.

Total Impressions

Before the current generation of social analytics, it was virtually impossible for a business to track all of the citations it received online. However, this is easy today. Now that your company can track trends based on your company name, industry hashtags and any number of relevant metrics, your total impressions across the entire Internet now becomes an important KPI. For the most part, all publicity is good publicity, and you want to maximize it when you can.

Goal Oriented

Your customer service representatives should be able to pinpoint a solution and move towards it very quickly. The more goal oriented your employees are, the more responsibility you will be able to delegate to them.