Trust, I would argue, is the most important pillar in my relationship with my Southeastern FL clients. Your financials aren’t to be taken lightly. When it comes time to put them in someone else’s hands, you have to know that those hands won’t falter.
And after the recent Bench Accounting closure, I wouldn’t blame you if your trust is somewhat shaken.
On December 27th, Bench Accounting abruptly announced its closure – locking customers out of their accounts and giving them until March to transition all of their documentation to a new bookkeeping service.
Since then, Employer.com has acquired Bench and is promising continuity of service and platform stability (for the juicy details, read all about it here).
So, here’s my life-raft extension to you: If you are a Bench client and now want to take your accounting local, please reach out. My team and I are glad to assist you in getting everything transitioned over – because right now, you need to have everything in order to be prepared for filing.
And as part of that preparation, here’s your friendly (but urgent) reminder to start preparing your 1099s and W-2s, as they need to be in your employee’s hands by January 31st.
Start working on these now. (Or, if your plate is full at the moment, let my team do it for you).
Perhaps, in the spirit of the new year, you could set a goal for yourself here: Getting your 1099s and W-2s prepared by the second or third week of January. Focus on how you can make this month (not the whole year) count. Then, when February comes, focus on what you can achieve in those 28 days. Because that’s how annual goals are actually achieved – one month, one week, one day at a time.
Another way you can make the most of this month? Making your goals measurable through Key Performance Indicators (KPIs).
When it comes to your business goals, it’s easy to get sidetracked – you can waste time pursuing a goal that’s too vague, or that doesn’t fully align with your overall vision. KPIs use a top-down approach to keep you in line with your core objectives and help you find the most strategic starting point.
KPI Setting in 2025 for Boosting Your Miami Metropolitan Business
“I was taught that the way of progress is neither swift nor easy.” – Marie Curie
Let’s say one of your 2025 business goals is to increase profits by 25 percent. After you’ve concretely defined that goal, you map out the specific actions you and your team need to take.
A lot of teams will stop there. But you really need to go a step further. Quantify those steps with plain-as-day numbers that will tell you how well you’re really doing – your KPIs.
A Key Performance Indicator (KPI) is a measurable milestone that shows your Southeastern FL business’s journey toward a specific goal. And by measurable, I mean objective, can’t-argue-with-that numbers that tell how close or far you are from your goal.
Good so far? Now, let’s start with understanding different types of KPIs, so you can know in which places your business should be looking to set goals – maybe even ones you weren’t thinking about…
Strategic KPIs are big-picture snapshots of how your business is performing (like your total revenue).
Operational KPIs focus on shorter time frames (daily or monthly) to provide actionable insights. They help you understand less-than-ideal results in your strategic KPIs.
Functional KPIs are department-specific and can be either strategic or operational.
Lagging and leading KPIs tell you what kind of data you’re dealing with – lagging indicators look at past achievements (like last quarter’s sales), showing what was accomplished. Leading indicators measure proactive steps that are expected to drive future achievements (like a service or product line that you haven’t brought out yet).
Knowing which KPIs to set for your business can be difficult – because they’re uniquely tailored to your specific goals and the nuances of your industry. And even before that, you have to know which areas need change and improvement and what that would look like.
So, here are a few common ones. Keep in mind, that these are just a baseline to help you figure out how KPIs can work for your business.
Financial:
– Gross profit margin: This measures how much your company retains after covering the cost of goods sold. AKA business revenue minus cost of goods sold divided by total revenue.
– Net profit percentage: This is your net profit divided by total revenue, multiplied by 100 (better dust off the calculator).
– Accounts receivable turnover, aka, how long it takes your customers to pay you.
Operational:
– Employee productivity: How much revenue does each employee bring in?
– Turnaround time, from order until delivery.
Customer-focused:
– Customer retention rate – the percentage of customers that come back for more.
– Net promoter score: How likely your customers are to recommend your business.
Again, this list is just to get you started. Business KPIs need to be specific to you and your 2025 business goals. Remember: You’re setting the mile-markers that ensure you’re making meaningful and profitable progress.
Make a plan
To set your KPIs, you’ll need to work backward: Start with your end goal, and from there, break down the steps required to make it happen. Take a look at this example:
Your goal: A hundred bucks in income by the end of the next six months.
Work backward: How will you get the hundred bucks? You’ll have to hire two new people, who will take two months after training to bring in that hundred in new clients or sales. And before that, it’s going to take them three months to get up to speed.
How will you hire the two new people? You’ll have to interview about half a dozen people to find each new hire, which will consume about a month’s time. Then, you’ll have to train them.
How will you find the candidates? You’ll have to place ads and review applications.
So, working back from your original goal (100 dollars in income) you now have action steps: Place hiring ads, interview 12 people, train your two new hires, and put them to work.
A few of your KPIs in this case are:
- How many candidates have been interviewed
- What percentage of training they’ve completed
- How much revenue they’ve brought in after training
These tell you, objectively, how close you are to getting that hundred bucks (and give you critical information to make informed decisions that will get you there).
Don’t get it twisted
KPIs can be less-than-productive for your business if you or your team don’t fully understand them. Make sure your staff grasps what they are and why they matter to create a united goal-accomplishment front.
You might highlight some of these points with your team:
- KPIs and goals are not synonymous. Launching a new product is a goal. Securing 10 preorders by February 15th is a KPI (albeit a short-term one).
- Tracking too many KPIs is impossible to stay on top of. Instead, focus on a handful of easy-to-track, impactful metrics. And consider setting some for quarters and months as well as yearly.
- KPIs should be clear. One way to eliminate ambiguity is by creating a “Measure Gallery” – a tangible KPI progress display. Hang it up in a space where your team can see it and chat about it (and maybe throw in some snacks to up the turnout).
KPIs can help you define the steps you need to take to reach your 2025 business goals AND keep you on track all year long. My team and I can lend some insight on the financial side of this conversation and also help you check in on your progress and realign things as necessary… if you let us.
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To each step in the right direction,
Ralf Heyer