Going Head 2 Head: Using Key Performance Indicators Panama City FL

Use "Key Performance Indicators" to compare your shop against others - and to identify and eliminate any weaknesses.

By Tony Passwater
5/1/2004

• If you don't measure it, you can't manage it.
• If you and your people don't have a target to shoot for, you certainly
  won't hit it.
• A smart person learns from his mistakes. A wise one learns from other's mistakes.

All these expressions are especially true when it comes to your shop's financials, which is why benchmarking is so important.

Benchmark Worksheet

Benchmarking is the process of comparing your shop with others to assess how well your business is performing. There are many possible measurements in any business. We joke that the way we used to measure our shop's success was that if we had any money left in our pocket at the end of the month, things were good.

If only it were actually that simple.

The problem with this is that no measuring is done until the perceived end so there's no way of knowing where the profit came from, if there was more profit possible or if what you made was acceptable for what you did.

Today we measure our business success using Key Performance Indicators (KPIs), which allow us to know how we're doing while we're doing it. The idea of benchmarking is to compare these KPIs to industry averages, industry leaders, your competition or your own goals.

Gross Profit Levels by Department

There are hundreds of possible KPIs in any business. The most common fin...