What would you think if:
- Your doctor ordered surgery without information from tests?
- Your accountant gave you an amount to pay the IRS without any calculations?
- Your attorney created petitions for your case without any information?
When a doctor gives you a physical your pulse and blood pressure are measured and other tests are done to determine the performance of the body. KPI’s (Key Performance Indicators) are the significant numbers that management must track in a company. When monitored closely, the company can make key adjustments that will aid growth and positioning with few surprises.
KPI’s are a set of measurements that paint a picture of a company’s health. These are inter-related ratios, measuring key activities and results. KPI’s that are tracked monthly with comparative data are a favorite tool for evaluating the health and potential of companies.
Just like the rhythms of the body, the KPI’s of a company cannot be isolated to form a diagnosis. Unlike financial reports that measure only what has occurred once reportable as dollars and cents, the KPI reports also include activities, performance, market and financial data with defined relationships that allow projections, indicate changes, and can be used to model the impact of the changes.
Measurements taken should compare both monthly and year-to-date performance with ratios created against goals set and the marketplace. The ratios become a quick benchmark that can indicate well being or specific actions needed. Few companies will take the time or effort track the information or evaluate the data.
The areas of measurement for real estate companies should include the following basics:
- Staffing - Recruiting, agent population (active and total), business at risk, employees and management.
- Business Pipeline – Leads, repeat business, related business, transaction time line, impact factors, and sources.
- Production – Presentations, listings, contracts written, opened business, closings, cancellations, and pendings.
- Financial – income, expense, commissions paid, profit, reserves, and investments.
- Market Share – agents, offices, companies, listings, pendings, closings, transaction timelines and source of business.
Each of these basic areas can be broken down into greater detail by profit center, market, or even groupings within the office. The data once accumulated and compared begins to not only tell a story but, additionally, paint a path of action.
Examples of KPI’s at Work:
- Pendings - The number and size of deals in the” drawer” can indicate the timing factors of a market. If the ratio between the number of sides pending against the total closed for the previous year is between 35 – 40 % consistently and you are running a 60 to 90 day closing time period, your business should close stronger than the previous year. If the time period extends or shortens, it will impact the ratio needed to be healthy. Additionally, if the number falls below 20%, and the time period has not shortened to a 30 – 35 day closing period, the business may be headed for financial problems. Other measurements will also impact the analysis, including cancellations, size of transactions and distribution of business.
- Business at Risk – The production of the top two producers in each of your offices is one of the areas that we consistently measure, called “Business At Risk.” It is not at all unusual for the effects of one’s production or lack thereof to influence the other. It is also not unusual that if one leaves the company, so does the other. Hence if 20% of the production of the office is from these two individuals, the impact of any change will be felt immediately by the company and the impact will also effect almost every other KPI in the company. Healthy companies set business objective for the production and producers needed in the company to all no more than a 10 – 12 % impact by business at risk.
It does not take long to see how a good set of KPI’s can strongly influence decisions and actions. If you are not using technology to track and calculate, start with a smaller set of KPI’s. Even a limited group of areas measured will bring insight and lead to results.
Creating a great company is a lot like keeping a body in good shape with hard work and by watching the numbers.
Soltys, Inc. offers a consulting program called Business Health Partners to help companies grow, develop and use KPI tools effectively.
Tomorrow's blog will be about the Power of KPI's and Friday we'll be introducing our new downloads section.
nike air max, montre femme, vans, hollister clothing, toms outlet, canada goose, swarovski jewelry, moncler, iphone 6 case, pandora charms, canada goose, gucci, uggs canada, ray ban, moncler, timberland shoes, karen millen, thomas sabo uk, converse, pandora uk, converse shoes, parajumpers outlet, lancel, moncler, coach outlet, moncler outlet, louboutin, moncler, supra shoes, ugg, links of london uk, baseball bats, moncler, oakley, louis vuitton canada, air max, pandora jewelry, hollister canada, swarovski uk, hollister, juicy couture outlet, juicy couture outlet, moncler outlet, replica watches, ralph lauren, wedding dress, canada goose pas cher, canada goose
the north face
coach factory outlet
louis vuitton outlet
air max uk
louis vuitton handbags
abercrombie & fitch
canada goose coats
louis vuitton handbags
uggs on sale
uggs on sale
ugg boots sale
louis vuitton outlet
cheap oakley sunglasses
nike huarache shoes
cheap air jordans
kids lebron shoes
michael kors handbags
ralph lauren uk
michael kors outlet
nike air max
louis vuitton outlet online
nike roshe run women
uggs on sale
coach outlet online
ed hardy clothing
Coach Outlet http://www.coachstoreoutlet.us.org
Christian Louboutin Shoes http://www.christianlouboutinshoe.eu.com
Valentino Shoes http://www.valentinoshoes.eu.com
Michael Kors Outlet http://www.michaelkorsoutlet.us.org
Coach Factory Outlet http://www.coachfactoryoutlet.us.org
Coach Outlet Online http://www.coachoutletonlinestore.us.org
Coach Purses http://www.coachpurse.us.com
Kate Spade Outlet http://www.katespadefactoryoutlet.us.com
Toms Shoes http://www.toms-shoes.name
Hermes Belts http://www.hermesbelts.us.org
Louis Vuitton http://www.louisvuitton-outletstores.us.com
Fendi Handbags http://www.fendibelt.us.com
Giuseppe Shoes http://www.giuseppezanotti.eu.com
Michael Kors Outlet http://www.michael-kors-outlet.us.com
Stephen Curry Shoes http://www.stephencurryshoes.us.com
Salomon Shoes http://www.salomonshoes.eu.com
North Face Outlet http://www.northfacesoutlet.in.net
Coach Outlet http://www.outletcoach.in.net
North Face Outlet http://www.northfacesoutlet.us.com
Burberry Outlet http://www.burberryoutletstore.us.org
North Face Outlet http://www.north-faceoutlets.in.net
North Face Jackets http://www.outletnorthface.in.net
Skechers Shoes http://www.skechersshoes.us.com
North Face Outlet http://www.northfacestoreoutlet.us.org
Nike Air Max http://www.nikeoutlet.us.org
Nike Hoodies http://www.nikehoodies.us.com
Marc Jacobs Handbags http://www.marcjacobshandbags.name
Marc Jacobs Outlet http://www.marcjacobsoutletstore.us.com
Jimmy Choo Shoes http://www.jimmy-chooshoes.us.com
Jimmy Choos http://www.jimmychoos.in.net
Burberry Belt http://www.burberrybelt.us.com
Louis Vuitton Belt http://www.louisvuitton-belt.com
Salvatore Ferragamo http://www.ferragamo-belt.us.com
Marc Jacobs Handbags http://marcjacobshandbagsoutlet.blog.com
Lululemon Outlet http://www.lululemonsoutlet.us.com
True Religion Outlet http://www.truereligion-outlets.in.net
Tommy Hilfiger http://www.tommyhilfigeroutlet.us.com
Michael Kors Outlet http://www.outletmichaelkors.eu.com
Coach Outlet http://www.outletcoach.eu.com
Red Bottoms http://www.redbottom.in.net
Kevin Durant Shoes http://www.kevindurantshoes.us.org
New Balance Outlet http://www.newbalanceoutlet.in.net
Adidas Outlet http://www.adidasoutlet.in.net
Coach Outlet Online http://www.coachoutlet-online.eu.com
Stephen Curry Jersey http://www.stephencurryjersey.us.com
Vans Outlet http://www.vansoutlet.us.com
Ralph Lauren Outlet http://www.ralphlauren-outletstore.in.net
True Religion Outlet http://www.true-religionoutlets.in.net
ED Hardy Outlet http://www.edhardyoutlet.in.net
North Face Outlet http://www.northfaceoutlet.eu.com
UGG Outlet http://www.uggoutlet.us.org
UGG Outlet http://www.outletugg.in.net
North Face Outlet http://www.northface--outlet.us.com
Ugg Boots Sale http://www.uggbootssale.in.net
UGGS For Women http://www.uggsforwomen.us.com
Skechers Go Walk http://www.skechersgowalk.us.com
Adidas Yeezy Boost http://www.adidasyeezyboost.in.net
Adidas Yeezy http://www.adidasyeezy.us.com
Adidas NMD http://www.adidas-nmd.us.org
Coach Outlet http://www.coachoutletinc.us.com
Post a Comment