Needs to be a positive number and not a negative number over time. You can get a quick read of your operating cash flow from the Income Statement known as EBITDA - Profits or Earnings and add back any Interest on Debt, Corporate Taxes Paid, Depreciation on Fixed Assets and Amortization Expense on Intangible Assets such as Patents
Divide your Profits or Earnings for the Month by your Total Sales. Needs to be at least 10% if you want a sustainable business. Track month to month - is it stable or growing slowly over time?
Survey your customers. Allow them to submit feedback and evaluate your product or service. You want an overall satisfaction rating of 80%. A score below 50% indicates poor performance. A score above 80% represents excellent satisfaction.
Add up all of your direct costs for product or service delivery to the customer. This includes Cost of Goods Sold, Cost to Store, Ship, Transport, etc. Add up these costs for the month and divide by your total sales. What remains is your gross margin to cover your overhead. Each industry has its own percentages that you can benchmark. As a general rule, I usually advise business owners to keep this metric at 60% or less to ensure you have enough margin to cover your overhead and return a good profit.
Identify a key repetitive activity that is directly related to servicing your customers. Conduct a time and motion study to establish a baseline cycle time. Start finding ways to reduce this time to help control costs and improve customer satisfaction.
Excel File includes three tabs: Reference Guide tab, My KPI Scorecard tab and Glossary Tips tab