How KPIs Help SMBs Succeed

Being an entrepreneur is rewarding and demanding. You might have 200 employees or be a team of one. Either way, the priority is clear: the health of your business.

It’s easy to power through the day-to-day: the rush of busy seasons and the worry of slow ones.

Change never stops. Many SMBs don’t realize you can prepare for it while keeping the wheels turning. This guide introduces how your small or mid-sized business can use KPIs to grow.

KPIs are not just for big business

Every enterprise started in the same place as you, as an SMB getting off the ground or pushing for the next level. They may not have had today’s tools. Imagine how much sooner they would have reached scale if they did.

The most damaging perception about KPIs is that they are only for established big business. That idea leads many SMBs to think establishing KPIs can wait. It’s important to know how to define your organization’s KPIs.

In reality, KPIs should guide decisions across your business, from the efficiency metrics for a service to the growth metrics that support a new hire.

The good news for small and mid-sized businesses is that tracking data is now affordable and simple.
Because KPIs tie directly to your objectives, they differ for every business. Implementation is a choice about what to measure, not a function of company size or generic “best practices.”

When you choose the right KPIs, you give your business a competitive edge.

6 areas you can improve your SMB with KPIs

Setting up KPI monitoring takes effort. If you already use platforms to track finances, marketing, sales, and operations, connecting your data gets much easier.

You can’t control time. You can take a snapshot of your business’s health at any moment. Instead of juggling calls with your accountant and spreadsheet tabs, look at your business through KPIs.
The goal is to understand how effectively you’re achieving key objectives without sacrificing productivity.

Here are a few common KPIs that help SMBs succeed:

1. Current Accounts Receivable and Accounts Payable
2. Net Profit Margin
3. Social Media Followers
4. Marketing Return on Investment
5. Product Performance
6. Sales Opportunities

Group them by department and expand on each one:

Finance KPIs

Current Accounts Receivable and Accounts Payable

The Current Accounts Receivable and Accounts Payable metric displays the current money owed to your business as well as the amount your business owes creditors.

This metric not only provides a quick glance at your financial standing, it also shows how this position compares to previous months. Cash flow is essential to the health of a business. Keeping this KPI on your radar helps keep debtor and creditor day averages low so your business operates within its means.

Net Profit Margin

The Net Profit Margin KPI measures how effective your business is at generating profit on each dollar of revenue. This financial KPI is a measure of overall profitability and is instrumental in making long- and short-term financial decisions.

A downward trend in this metric may indicate you need to adjust your price point or re-evaluate your product relative to competitors. Also consider changes to your industry in general.
When you build this KPI in your dashboard, add indicator and comparison lines to show where profit sits against past performance.

Marketing KPIs

Social Media Followers

This social media KPI lets you think about all the social platforms you use as a single factor of growth.

Social media marketing matters for small and mid-sized businesses. At a relatively low cost, you can use social platforms to build brand awareness and reach current and future customers.

This KPI helps you evaluate channels that work, ones that don’t, and ones that need more attention. Monitoring it is important for understanding the impact of your marketing efforts.

Marketing Return on Investment

This marketing metric helps you assess the financial impact of a campaign. With a small team, you may not run many campaigns at once. That makes close monitoring even more valuable.

Understanding the impact of these campaigns helps you determine what works and what doesn’t. Beyond contributing to growth, effective campaigns create a strong first impression of the business.

Sales KPIs

Product Performance

This KPI ranks product sales by revenue to show which products are selling well. Small and mid-sized businesses often rely on spreadsheets and intuition to understand product performance. Early on, that can feel efficient.

At first glance this KPI looks like just another sales metric. In practice, it also tells you a lot about your marketing and price points. It shows how customers respond to offers and positioning.

Sales Opportunities

Managing active and upcoming sales is demanding for a small team, let alone one person. It’s important to know what’s coming so opportunities aren’t missed. Consider tracking this KPI using a Salesforce dashboard.

The Sales Opportunity KPI organizes prospects by opportunity value and the probability of closing. Each prospect has an estimated purchase value to help your team prioritize their efforts.

Start solving SMB challenges with dashboards and reporting

Every business has unique processes and problems. Running an e-commerce business is different from a mom-and-pop shop. The KPIs in this post are useful for almost any business.

For more industry-specific KPIs, see our list of KPI Examples. You know what’s important to your business, and monitoring metrics makes it easier to keep priorities in check. With Klipfolio Klips, you can bring these KPIs into a real-time dashboard and share clear, on-brand reports with your team.