For many businesses, there is only one key performance indicator (KPI): profits. If you are making money, things are fine; if you aren't making money, things have to change. But while profits are obviously important, they are not especially helpful as a KPI when it comes to making the necessary changes to move your business from the red to the black. As a franchisor, you need to develop a data analytics system that helps you make the connections you need to find the answers you need. Here are a few tips on how to get the most out of your franchise data.
Pick the Right KPIs
Identifying the right KPIs for your business is crucial, because there is no set of standards every franchise should use. There are lots of things that can be measured, but a KPI must tie directly to your business objectives and profitability. Spend time identifying what aspects of your business really tie in to your profitability. What are the things that, if they occur, ensure that you will have a profitable month or quarter?
Have SMART KPIs
Aligning your KPIs with your business's performance is only half the battle; now you have to be SMART. SMART stands for:
Specific: Can you describe your KPI in a sentence or two? Can you describe what would happen if you achieve your KPI?
Measurable: Can you define your KPI in terms of something that can be objectively counted or measured? Can it be something you can compare to a benchmark or past events?
Achievable: Is the KPI something you can feasibly accomplish with your resources and abilities?
Relevant: Can you describe how your KPI relates to your profitability? What will happen to your business if you exceed your KPI goals? What will happen if you miss your KPI goals? This is something you should have addressed first by picking the right KPI.
Time-Oriented: Is your KPI something that is relevant within a given time frame? Is this something you have to achieve every week, month, quarter or year?
Unless your KPI meets all of these criteria, you won't be able to get the insights you need to take your franchise to the next level.
Get the Help You Need
If you are not using your franchise data every day to inform your decisions, you are putting yourself at a disadvantage. You need ProfitKeeper to simplify your franchise data collection and analytics process. Contact ProfitKeeper today to schedule a demonstration and see how much better your business can be by using data to increase profits.