Failing to identify and track key metrics is stunting small business growth, according to a study.
Nearly half (49 per cent) of small and medium-sized enterprise (SME) owners have failed to identify any Key Performance Indicators (KPIs), the critical metrics which contribute to their business’s growth, according to a survey by Geckoboard.
Even those that do establish KPIs most commonly only look at them on a monthly basis. A third of businesses (31 per cent) also say that the key numbers they track are never reassessed.
More than a third (39 per cent) of SMEs fail to meet all of their growth targets in 2015.
Half (50 per cent) of British staff admit that their overall performance is compromised when they are not made aware of key company information and metrics.
However, the research does highlight a smaller group of SMEs that are taking KPI measurement very seriously, with around a quarter (24 per cent) saying they monitor their KPIs in real time.
The research also finds these businesses are reaping the rewards of careful tracking; three quarters (74 per cent) of businesses which monitor KPI’s in real time hit all their growth targets, almost twice the average.
The best examples of data-driven companies tend to be managed by a new guard of younger business owners (aged 20-44), who are twice as likely as older business owners to monitor KPIs in real time.
Real-time KPI monitoring is also most common in London compared to the rest of the UK, where nearly half (45 per cent) of SME owners say they monitor KPIs in real time.
Paul Joyce, CEO of Geckoboard says that with so much available data, entrepreneurs are forgetting to identify which metrics and data are most important to their business using KPIs.
‘If you’re not keeping a close eye on critical business metrics and sharing progress against those KPIs with your team , how can you expect your business to grow? You could also be missing out on important signs for future growth or even worse, signs of trouble ahead,’ he adds.
‘There are so many things that are outside of an entrepreneur’s control, but establishing and tracking key company data is not one of them. Businesses which don’t learn to follow suit are limiting their chances of growth before they even get properly started.’
Further reading on KPIs
See also: Preparation the key to small businesses