YOU BUDGET YOUR KPIS BECAUSE... IF YOU WANT TO MANAGE THEM, YOU HAVE TO MEASURE THEM!

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YOU BUDGET YOUR KPIS BECAUSE ...

IF YOU WANT TO MANAGE THEM,

YOU HAVE TO MEASURE THEM!

You have a choice as to how your business performs. No other person has a greater vested

interest in the success of your business. If you know the formula for success it is then your choice, to do what is needed ... or not!

Success in managing your business can be reflected by how well you budget and monitor your KPIs! There is no magic in the formula. Unsuccessful businesses are often run by the ‘seat of the owner’s pants’.

There are three clear steps in using KPIs: 1. Planning;

2. Doing; 3. Monitoring.

Understanding your Business, your People, your Products, your Customer, your Market and your Industry are critical factors in successfully planning your KPIs. You budget your KPIs in line with your business Vision and Mission.

You budget your KPIs based on your knowledge and understanding of the potential for sales of your products and services ... to measure activity in your business. The first step, the Planning, is to determine those 8 or 10 Key areas that you will measure to know your business is on track to achieving your short, medium and long term goals.

Following is a list of likely KPIs ... you might want to select all of them. The secret is to select only

the KEY PERFORMANCE INDICATORS. The spreadsheet pages are designed for you to prepare monthly

and weekly KPI budgets.

You budget your KPIs both in UNITS and in DOLLARS. By focussing activity on the ‘number of units’ you can then identify the best activities for you to achieve your desired outcomes. This will set you on the path to actively measuring the effect of your activity and your business’ ability to achieve the outcomes you desire.

The second step, the Doing, is to ‘take action’. All the budgets in the world will not achieve any outcomes unless you take action. Take action to achieve the performance in the areas that you have budgeted. For each KPI, establish specific strategies to achieve the budgets you have set. It is these strategies you review when considering KPIs that are not performing to your requirements. Finally, the Monitoring, you monitor the effect of your activities on the business. Ensure that your accounting and record keeping systems are in place so that you can measure how well the actions you are taking are contributing to the KPI budgets you have set. Measure the performance of each KPI week by week. At the end of each week, review the performance of the business. If you are below budget, determine what action you can take to improve the situation.

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Brightwater Business Coaching Pty Ltd S:\BP\3 Mkting\SEMS WRKSHPS\Take 3\Workshop Documents\T3 Debrief Handouts\04_KPI Spreadsheets_BBC.docx You can review the KPI budgets for future weeks to identify if you can make up the shortfall or leave the re-budgeting to the end of the month and adjust future months. A critical part of budgeting is to tell someone. If you are the only one who knows what you want to achieve, you can ‘let yourself off the hook’ when you fall short. Develop your KPI targets with your team as it is your team that will contribute to your business achieving its goals.

Your Brightwater Business Adviser provides you a structured process in achieving your goals when you choose the Brightwater Direction Monitoring©_process.

Here is a list of items that you might consider as KPIs. This list is not ‘all inclusive’. You should select from this list only those that truly reflect a measure of performance at the highest level of your business. Some of these might be FPI’s (Functional Performance Indicators) and should form part of monitoring the relevant Functions of your business.

Sales

1. Gross Turnover (Invoiced Sales) Value & Volume; 2. Sales by Product Group/Stream Value & Volume; 3. Average Sales per Sales Person Value & Volume; 4. Sales per FTE (Full Time Equivalent) Value & Volume;

5. Average sale per customer Per customer/per purchase; 6. Orders written by Product Group/Stream Value & Volume;

7. Orders written per Sales Person Value & Volume; 8. Orders written per FTE (Full Time Equivalent) Value & Volume; 9. Credit requests

Customers

1. Target number @ average dollars (5 above) to achieve sales budget

2. Number of customers per week/per month;

3. Number of new customers 4. Number of repeat customers 5. Total number on database

6. Customer satisfaction/dissatisfaction Productivity

1. No of units started, completed, WIP. 2. No of units rejected

3. Total available production person hours 4. Productivity rate

5. Chargeable hours to total available hours per person/per company Human Resources

1. Team size Per category

2. Attendance/Absenteeism rate 3. Appraisals due/performed Financial Indicators 1. Gross Profit 2. Overheads 3. Net Profit 4. Wages to Sales 5. Breakeven Point Marketing 1. No of leads generated 2. Conversion rate

3. Source of new customers 4. Number of customer referrals Business/Industry Specific Factors

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THE BRIGHTWATER SYSTEM© _{KPI BUDGET SPREADSHEET}

KPI MONITORING for ____________________ 6 MONTH PERIOD ____/____/ 20___ to ____/____/ 20__ DATE PREPARED _____/_____/ 20__

MONTH KPIs JANUARY / JULY FEBRUARY / AUGUST MARCH / SEPTEMBER APRIL / OCTOBER MAY / NOVEMBER JUNE /

DECEMBER 6 MONTH TOTAL

Budget Actual _{#/$ Budget Act.}Var _{#/$ Budget Actual}Var _{#/$ Budget Actual}Var _{#/$ Budget Actual}Var _{#/$ Budget Actual}Var _{#/$ Budget Actual}Var _#/$Var Var % SALES Av. $ $ Nº GP $ % O/HEADS $ % NET PROFIT $ %

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KPI MONITORING for ________________________6 MONTH PERIOD ____/____/ 20___ to ____/____/ 20__ DATE PREPARED _____/_____/ 20__

Month KPIs January / July February / August March / September April / October May / November June /

December 6 MONTH TOTAL

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KPI MONITORING for ______________________ MONTH of ______________/20___ DATE PREPARED _____/_____/ 20__

KPIs Wk 1 W/E / / Wk 2 W/E / / Wk 3 W/E / / Wk 4 W/E / / Wk 5 W/E / / MONTH TOTAL

Budget Actual _#/$Var Budget Act. _#/$Var Budget Actual _#/$Var Budget Actual _#/$Var Budget Actual _#/$Var Budget Actual _#/$Var Var %

SALES Av. $ $ Nº GP $ % O/HEADS $ % NET PROFIT $ %

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KPI MONITORING for _______________________ MONTH of ______________/20___ DATE PREPARED _____/_____/ 20__

KPIs Wk 1 W/E / / Wk 2 W/E / / Wk 3 W/E / / Wk 4 W/E / / Wk 5 W/E / / MONTH TOTAL