How to measure the business
Metrics should be a way of judging how well you are running the business.
They need to be understood by those that can make changes based on them and also consistently applied and calculated.
It can be very simple measures such as profit percentage - say 25%.
It can be a metric that is used as a basis for making a hiring or investment decision.
They need to be timely - no good knowing 20 days after the end of the month that staff costs are running too hot as you are almost through the next month already!
Look for how much you are generating from your people and how that relates to the averages within your sector.
Some examples that you should explore:
- Profit percentage
- Amount of turnover generated by each member of staff
- Staff turnover
- The ratio of staff cost to turnover