Key Performance Indicators 101
Have you ever set a New Year’s Resolution and a month later realize that you’re not on the right track and just give up? That’s okay, 90% of people do (..guilty as charged). One reason that I lose sight of my New Year’s Resolution is because I set a large goal but don’t break it down to more measurable goals to keep myself on track. Each year I decide to save money. Instead of just saying “Time to save money,” what if I broke it down like this:
In order to save money, I’m going to cut back on unnecessary spending. I’m going to measure:
- Money spent on eating out
- Money spent on shopping
- Money spent on entertainment
Because I’ve described how I’m going to reach my goal, I can accurately measure my progress. In business, this is called a key performance indicator.
The official definition of a key performance indicator is “a measurable value that demonstrates how effectively a company is achieving key business objectives”. It’s a way to ensure that every level of employee is being held accountable and staying on track with the company’s overall goals. Let’s go through some examples:
Business Objective: Increase Service Quality Performance. How are you going to measure that?
- Online review star-rating
- Number of complaints vs number of compliments
- Number of complaints per technician or service
Business Objective: Increase Technician Efficiency and Scheduling Efficiency. How would you measure that?
- Amount of time spent at each house for each service
- Amount of time spent driving between each house
- Amount of downtime between each service
KPI’s are so critical to the success of service companies that we’ve added on an entire workshop to our annual service industry owner’s conference, CO2. This year, Dan Gordon and Donnie Shelton are partnering together to work with business owners in developing KPI’s for their entire team. Join us Friday, December 7th to learn how you can start your year off right by developing and implementing new KPI’s.
Daniel Gordon, CPA is a managing partner of PCO Bookkeepers, Turf Books and PCO M&A Specialists. With more than 25 years in the pest control and lawn care industry, Dan's firms provide pest control and lawn care business owners with CFO consulting, tax planning and preparation, accounting, bookkeeping and merger and acquisition services. Donnie Shelton is the owner-operator of Coalmarch Productions and Triangle Pest Control, and the author of Grow! IMS and Build. Both Donnie and Dan have learned what it takes to successful grow and operate companies in the service industry, and they are eager to share their knowledge with you. Take advantage of that opportunity!
CO2 is all about helping pest control, lawn care, HVAC and plumbing companies grow their business. It’s packed with two full days of speakers focusing on a variety of topics, like building your team, recruitment strategies, marketing trends, sales techniques, developing leadership skills and more. CO2 is December 4-7, 2018 in Raleigh, NC.
Interested in signing up for CO2?