Founders are constantly hearing how important key figures are. In fact, you can easily ensure the continued existence of your company with the right KPIs. But which key figures should you measure for it, which can you neglect? And what are KPIs anyway?
We would like to introduce you to all of this in this chapter so that you have a rough overview in the future and know which numbers you can use to read how your company is doing at the moment.
What are KPIs?
The term KPI is an abbreviation of the term key performance indicators. These help you to check the success of your company and enable you to control all processes and thus the management. So you can change something in time if necessary.
In which areas do KPIs play a Role?
There are KPIs for almost every area, which is why you should look at different KPIs depending on the company and start-up phase to check activities. This allows you to monitor almost any process, with some numbers easier to identify than others. For example, here are some areas for which KPIs must be considered:
- and much more
Especially in the online area, KPIs are easily measurable, but there are tools like Google Analytics that help with the evaluation. Here you can read at any time how your marketing, your online shop or your online campaign is going.
Detect errors and optimize Processes at an early Stage
Not only large companies have to pay attention to their numbers. Also for small and medium-sized companies and thus also for start-ups, checking their key figures is essential. Before starting up, for example during your business model development or even during your idea generation process, you should start to log and check the first numbers.
And which KPIs matter?
Depending on the phase your start-up is in, other KPIs are important. We have listed the three most important phases at a glance.
#1 Looking for the Business Model
If you are still looking for your business model, key figures are important that reflect how many of your hypotheses you were able to test this month or talked to many potential customers about your idea. By documenting this every month, you always keep an overview. With several ideas presented, you can quickly select a favorite based on the number of enthusiastic potential customers.
# 2 Market Entry and the first Customers
When your business model is validated, financial metrics such as sales, costs and of course profit are of course important. Again, you should use tools or a system to keep track of all the numbers. This is important because you need to know if you will earn enough to just cover your expenses or if you will be able to make a profit right away.
# 3 Growth
If you go into scaling, key figures that reflect your growth become important, for example, new users per month. Online marketing is a good example of which numbers are important here:
If you want to find out how many are interested in your products, you can measure the number of visitors to your homepage. If you want to generate leads, you can create landing pages and keep an eye on their conversion rate. However, these are only numerical values, it is much more important to find out where the water holes of your visitors are, which channels work well and which do not. With the help of the KPIs you can decide how you will adapt your marketing to your target group again and again.
When to check your KPIs
You can decide when and how often you check your KPIs. However, it is recommended to set fixed dates for this. It is also recommended to review the numbers at least once a month. It is only particularly important that you concentrate on those KPIs that advance you in process optimization, these are usually the numbers that revolve around costs and sales.
These are different in every area and in every phase of a company, but you will quickly develop a feeling of which numbers you should evaluate, especially after reading some examples like this one. In the end, it is always a matter of checking whether you can generate the required profit, which you need for your company to be successful, or whether you should tweak your processes.
At the Tech Startup School you will not only be prepared for what it will be like to run your own company, but you will also be accompanied in all steps of the start-up.