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4 Top Indicators of Company Performance

Posted on 9 years ago
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Increasing revenues and profits are major objectives for all small business owners, and the company’s progress toward these goals is used to evaluate the business’s performance, but the business owner has other ways of measuring performance as well, based on evaluating additional key performance indicators.  In its simplest form, a KPI is a type of performance measurement that helps you understand how your organization is performing.   Here are four key performance issues to measure company performance:

  1. MARKETPLACE PERFORMANCE

Performance in the marketplace influences profitability. The key indicators of market performance are market share and market rank by sales volume. If you have a substantial market share and rank in the top two suppliers, you have market influence on pricing and are more likely to be profitable.

  1. CUSTOMER/ CLIENT SATISFACTION

It costs more to acquire new customers than it should cost to keep a good customer happy. Client satisfaction is a key performance indicator in a company’s long term success. The key performance variables are customer retention and the rate of customer acquisition. If you have satisfied customers, you retain those you have and get new ones at a rapid rate through referrals, etc.

  1. EMPLOYEE RETENTION

Two indicators of a company’s performance internally are employee job satisfaction and training levels. These impact overall performance through the ability of the company to offer high levels of service to its customers. You can evaluate employee job satisfaction by measuring changes in the average length of service. A measure of training levels may be the percent of employees who received training each month.

  1. FINANCIAL

If you want to compare your company’s performance with a wide variety of other companies, financial indicators are a neutral tool for evaluating performance. Financial key performance indicators are generally based on income statement or balance sheet components, and may also report changes in sales growth (by product families, channel, customer segments) or in expense categories.  Profitability, liquidity, debt, and activity ratios are also key financial indicators to determine a company’s success.

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