Key Performance Indicators have long been regarded as vital for effective business management. But with so many to choose from, which ones are best for your business?Key Performance Indicators (or KPI’s) are specific measurements of various parts of your business activity. They are used to check performance against targets or as benchmarks or to monitor trends.On their own they yield limited information, but as a comparison they can instantly identify areas in need of improvement allowing management to focus on the parts of their business that will contribute most to success.Much like the dials on the dashboard of your car, KPI’s work best when they are few in number.There are literally thousands of things going on underneath the hood, but if those three or four things showing on the dials are pointing in the right direction, chances are the car will reach its destination.And it should be the same with your own Key Performance Indicators.Less is more so it’s imperative that the Key Performance Indicators you select are the ones that will ensure you reach your desired destination. Which, incidentally, is another reason why your business plan is so important.The best way to ensure you have the right KPI’s for your business is to take a step back and examine your business plan for the Critical Success Factors (or CSF’s) – The things you have to get right for your business to achieve its objectives.One might be cash flow. After all, it’s hard for a business to get anywhere without it!So a manager might introduce turnover as a Key Performance Indicator to measure against set targets. And there might be a pleasing trend.Although if increased sales are being achieved by an aggressive discounting strategy sales would probably have to increase significantly just to maintain the business’ current position.Therefore a smart manager might also include their achieved margin as a related KPI.Monitoring both turnover and margin will instantly inform management if the strategy is successful and if it will result in increased cash flow.Of course a sale isn’t a sale until the cash is in the bank.So if the business extends credit it is also a good idea to monitor the average amount of time it takes to receive the money.If increased sales are being achieved without systems to convert that sale quickly into cash the strategy could be counter productive.These types of KPI’s are called “sub system” KPI’s and considered together they can provide some insights on how your business is really performing.And, most importantly, what to do about it when it isn’t.
For those of us who have chosen careers in business, it makes sense to have all the business reference books you need close at hand. Thus, when giving speeches a colleges to MBA students, I often recommend that they start building their business library now. Indeed, my business library is somewhere between 3500 and 4000 books and lately, I have been going through it and giving away the books I no longer need since I am now retired.However, I am not pitching all the books quite yet, because they say that the entrepreneurial itch runs deep and if it chooses to show itself again, then I want to be ready. So, with this truth told, let me recommend a few of the books that are staying on my personal business shelves that have to do with business management. If you do not have these books, I recommend considering them for your self:”The One Minute Manager Gets Fit” by Kenneth Blanchard, PhD. – 1986″Market Driven Management – Prescriptions for Survival in a Turbulent World” – B. Charles Ames and James D. Hlavacek – 1989.Market Driven Management is the key to winning in the new paradigm of the fast paced market, with fierce competition, global markets and “exploding technologies and higher R and D costs” states the author.”Getting IT to the Bottom Line – Management by Incremental Gains” by Richard S. Sloma – 1987.This book explains how business managers can grow their businesses and manage by goal setting, careful evaluation and repeating that process. It is not some sort of get rich quick way to go about your business and the author makes it clear that it takes discipline, but assures the reader that this way works.He talks a lot about business ‘profit’ planning, after all people are in business to make money. In the second half of the book he spends his time on the important task of measuring financial performance, and how to use this knowledge to project, set new goals and continue refining the process of making money, the bottom line.I wish you all the best in starting and contributing the best books in business to your business library and wish you continued success in your business career whether you are a manager, corporate executive or a fearless small business entrepreneur.
Business management degrees cover a broad category and give graduates plentiful opportunities to find work with the government, an accounting service, private enterprise or other managerial positions. A management program prepares students with essential skills and knowledge for a successful future in organising the day to day schedule and operations of an organisation and its staff.Since there are such a wide variety of managerial positions available worldwide, it can be difficult to pinpoint exactly what responsibilities are required by a person with a business management degree. However, it can be confidently stated that most managers hold positions of significant responsibility within a company, utilising their skills and professional experience to coordinate staff and resources to help achieve the goals of the company you are working for.If you have high hopes of becoming a financially successful manager, you should know that most people that fit into this category have sought a degree much higher than their high school leavers certificate. Large companies with international renown often require a master’s degree to be considered for a managerial position. You can always seek out a trade certificate first and see what employment opportunities come your way, but often it is recommended that you achieve the highest level of education you can. This will better prepare you for any position you are offered and choose to accept.With business management degrees you also have the opportunity to specialise in the following subcategories including: tourism, forestry, communications, humanities, biotechnology, sustainable business, nursing and trade training. By selecting an area of interest you wish to pursue, you can specialise in something that can get you a more focused employment position.Obtaining a degree from a respected university is a popular route to becoming a manager. Building a strong resume and taking up important leadership positions during your education, whether paid or as pure work experience, can be crucial in the decision making concerning your possible employment with a company after university or polytechnic.People who decide business management degrees are for them enjoy being in charge and making important decisions. A successful manager will have skills both in the business world and with people. Since managers work with people every day in a company setting, they must be comfortable and confident with both aspects. A big attraction to managerial positions is that often there is a significant pay increase with the promotion to these roles. So if organisation and people skills are one of your strong points, why not seek out a great university or polytechnic to begin building your future in business management.