In the competitive Canadian startup environment, every company requires essential KPIs; proper KPIs help startups track their growth, explore avenues of improvement, and plan for the future.
What are KPIs?
KPIs serve as the means of measuring how well you perform towards your goals. You can evaluate your sales, advertising, customer satisfaction, operational efficiency, and more.
Why are startup KPIs important?
Many reasons make KPIs a must-have for startups. You can assess where its working components exist and where there is room for improvement.
New startups should use KPIs as a basis for decision-making on their next steps. For example, when a KPI like cost of customer acquisition reduces, a firm owner could wisely increase the amount spent on marketing and sales.
How to establish startup KPIs
The first move in designing your business’s KPI roster is understanding your objectives.
Once you’re confident about your goals, consider every measure you might need to implement along the way to reach your standard and maintain it.
Next, find KPIs that align with those measures and goals. Below are some popular KPIs to get you started, but don’t hesitate to search for more.
Best KPIs for startup businesses
The optimal KPIs for startups depend on sector and business types. New businesses often use KPIs like:
- Cost of acquiring a new client (CAC): The average total marketing and sales costs you dedicate to earning a new client.
- Customer lifetime value (CLV): An estimate of the total revenue your business will earn from a single client, on average. Simply multiply the average order value by the average number of orders per client.
- Monthly recurring revenue (MRR): Each month, MRR can be calculated, which is especially relevant if your business relies on monthly membership/subscription fees or frequent purchases from loyal clients.
- Churn rate: The rate at which people abandon your business’s services. Divide the number of lost customers by the number of total customers within a given time period.
Implementing KPIs effectively
Check to ensure that the KPIs are:
- Clear and measurable. For example: “Increase customer satisfaction by 10% in the next quarter.”
- Challenging but achievable. If your KPIs are too simple, don’t expect them to inspire creativity. But if they are exceedingly difficult to approach, you will be discouraged.
- Relevant: KPIs should support corporate objectives, whether that means an increase to sales, website traffic, conversion rate, or average order value.
It is essential to monitor KPIS on a weekly or monthly basis. This is because it helps you track trends and review your strategy.
KPIs should be shared with the team; sharing KPIs with a group will unify them with your overall organizational objectives and push them to perform better.
Bonus strategies for developing excellent KPIs for your Canadian startup:
- Assess your startup’s progress. KPIs for early-stage startups differ from KPIs used for mature ones.
- Design KPIs specific to your industry and business objective. A “standard” method of KPI establishment does not exist.
How many KPIs should my firm have?
Managing many key performance indicators can also be very time-consuming. Keep your focus on 5 to 10 critical success factors, which allows you to zero in on the vital signs of your company instead of delving into every detail of data.
Conclusion: Now you can set game-changing KPIs
The Canadian startup marketplace is exceptionally competitive, so any success-bound company should have a strong set of KPIs. Canadian business people measure KPIs to keep their targets straight, evaluate their wins, and make better decisions for the future. If you’re unsure you’re headed in the right direction or you simply want a boost, book a free consultation with our financial planners.
