Growth Planning Post COVID-19 Shutdown: KPIs & Flash Report

In this blog I will be discussing step six of creating your COVID-19 shutdown growth plan, creating KPIs and a flash report.

A KPI is a quantitative business metric that measures a specific criteria’s performance. KPI is an acronym for Key Performance Indicator.  These gauges were created to gauge execution of key drivers of your business model.  Fundamentally, KPIs measure the key components that drive business performance.  KPIs represent present and future-facing vs. historic data thus they allow for better decision-making and are extremely useful in determining and planning for future business growth.

A Flash Report is your KPI dashboard.  It has 3 sections: liquidity, profitability & productivity and it consist of your KPI as well as a few other measurements that affect your business model.  Five common KPI are: revenue, gross margin, net margin, accounts receivable turnover, current ratio and quick ratio.  With you input, your controller creates this flash report and this report is reviewed weekly or bi-weekly.

You should review your flash report weekly.  Managing by exception (trends) will lead you to investigate discrepancies. These red flags should then be addressed by you and your team to assure you are on the correct path to success.  Dashboard tools include QuickBooks plugins like Fathom, Klipfolio, Domo, Databox or traditional Excel spreadsheets.

My next blog will cover monitoring, evaluating and adjusting your growth plan.  As always, if you have a business question or issues you would like to discuss, please feel free to reach out to me via our Contact page here on our website, www.ParadigmStrategies.com.

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