5 Reasons why businesses don’t have performance measures
There are many reasons given by business owners for why they don’t have performance measures. In this post I have outlined five reasons
1. Already know – no need to measure it. Often when business owners don’t have KPI’s it because they believe they know what is going on This might be the case when the business is very small however it definitely not the case when the business expands. It is the little things that the KPI’s will reveal. Little things that added together will make a huge difference.
2. Got real work to do - There can be an attitude that having a few targeted metrics distracts people away from doing the real work. But, it is the business who is willing to spend the time to work out how to do things betters is the business who will succeed. Just because it seems like unproductive time it will lead to consistent improvements which will mean a better business, better profit and more enjoyable for all.
3 Bottom Line is good enough. There could actually be two reasons within this statement. Some business owners believe that it is possible to manage a business from the profit and loss statement. These statements are just history and by the time the information is in the P&L Statement it is too late. Also the other part of the statement is that if the profit of a business is growing it can make management complacent. This can then lead to the focus being put on the wrong things. Some key metrics will keep the focus of the business on what is important.
4. Don’t like or understand numbers. Unfortunately I have heard this one too often. But it is simply impossible to manage the business without knowing or understanding the numbers. But it does not need to be a list of complex numbers. Numbers can be graphically presented to make them easy to understand for everybody.
5. Don’t have the data. Whilst this may be the case it should not be used as an excuse not to redesign the systems so that data is available. Take the time and ensure the data can be collected so the metrics will be useful.
It is necessary to understand the key numbers of a business so correct management decisions can be made. 01
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