Know Your Numbers for Solo Entrepreneurs

Key Performance Indicators, or KPI’s, are quantifiable measures that tell you how your business is doing. The numbers should measure your overall company goals and objectives which is one important element of a business plan. If you don’t know what you are working toward you have no way of knowing if you are on track. If you have an overall idea of what your goals are, then you can start putting together your KPI’s.

KPI’s differ from company to company, department to department, or person to person. A sales person will have different KPI’s than a customer service agent, for instance. The sales person is watching their leads, conversions, and sales while the customer service agent is watching the number of calls handled, handle time, and availability.

As a solo entrepreneur, you are most likely wearing all those hats so here are three basic key performance indicators to get you started:

Number of leads/prospects - Every client starts as a lead so it is important to know what is in your pipeline. There is a science to understanding how many leads it takes to get one customer so you will have to figure that out based on your own experience. When you are first starting out you may only convert one in every 10 leads but as you become better and get really good you might convert three out of 10.

Source of leads - As a solo entrepreneur, every dime counts when it comes to marketing so keeping an eye on your lead sources is crucial. You want to be sure that you are getting a return on your marketing dollars and tracking your lead sources is the best way to do this. Always go all the way back to the source of origination. Meaning, if you got a lead from Sally who you met at the ABC expo, the lead source is the ABC expo.
Sales - This is obviously the most important indicator of the health of your company. How do you know if your business is healthy or not? You should have a sales forecast for the year broken down by month and by products and services. Then you can take it further and figure out what your weekly and daily sales need to be. The numbers will tell you what you need to know.

So why aren’t business owners looking at their numbers? Two reasons: one is that they don’t know what to look at and they overcomplicate it and two is that they are afraid of what they might find out. The remedy for the first reason is to do a business plan and figure out what your company goals and objectives are and get a sales forecast in place. The second remedy is simply to face the facts. Oftentimes it isn’t as bad as you might think. My encouragement for you is that if you have not been looking at your numbers you will start with these three basics and you will schedule a Get Focused consultation with me so we can see where you are at. Remember, you can achieve whatever you believe as long as you are willing to work for it!