5 Steps to Setup Your KPI in Business Strategy

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What is KPI? How many types of KPI? How can it be differentiated with each other?

KPI stands for Key performance indicator it merely means it measures the essential overall performance of the company, how a company can completely bring out the critical ambition. The farm can get the maximum benefit by using KPI its uses in different level to check out the success of enthusiasm. KPI can be categorised into two parts financial KPI and non-financial KPI. They both boost the business level.

What is Financial KPI?

Financial KPI measures the financial position of it shows the company profit and loss. Financial KPI is an activity which every business can use it on there to measure the overall effectiveness of the farm. It is based on the balance sheet and income statement of the farm. Online accounting software is one of the financial tools which also help you in your business strategy to know the overall performance of the farm, with the help of the this you can check out, identity, and analysis the overall position of the farm. Assess your whole income statement and balance sheet of the farm and execute the plan.


What is Non-Financial KPI?

Non-Financial KPI is not directly related to financial KPI, but it is directly related to the business ambition. It measures the farm’s activity, and the actions perform by the members of the company like the staff involved in the farm, lead generation, consumers turnover, health-related incidents, and test. It measures the overall quantitative performance of the farm which cannot be measured in the numerical terms.

How does it work?

KPI is mandatory in business because without using it no business can be effectively run for an extended period. Focus on everyday work of the farm KPI come into the ground and play a significant role Key Performance indicators apply in both individual levels as well as in organisation level.
Let us discuss in detail what are the Financial Key Performance Indicators (KPI) Metrics and Non-Financial Key performance indicators Metrics. Every marketers and business need to know these metrics.

KPI - Key Performance Indicator

Financial KPI metrics

♠ Market Share

Financial KPI helps you to measure the overall Market share %. Whereas market share rate indicates the global growth of the farm by using financial KPI. Marketing KPI is a most dominating and well-maintained strategy which every marketer need to know for the accomplishment of their individual and organisational goal.

♠ Growth in Profit

It shows the company profit which can be measured by using different KPI, and these are.

1. Gross profit margin – Gross profit margin also known as gross margin. It analysis the financial statement and show the financial health of the company by comparing the revenue to the cost of the goods sold. To know the gross profit margin here is the mathematical formula help you to calculate.

GROSS PROFIT MARGIN- Revenue – Cost of goods sold / Revenue

2. Net profit margin- Net profit margin is the percentage remaining after deducting the sales form it. The equation may clear you the whole concept.

NET PROFIT MARGIN- Net profit / Total revenue

How we calculate the net profit will discuss in the next point.

3. Net profit- Net profit is the actual profit of the farm. It includes all the operating expenses that are excluded from gross profit.

NET PROFIT- Total revenue – Total expenses

4. Current ratio- It shows the overall ability of the farm to pay the long as well as short-term needs of the farm, it also known as liquidity ratio and to see the equation which is used, Deduced the current liability from the current asset of the farm.

CURRENT RATIO- Current Asset- Current liability

Non-Financial KPI metrics

♠ People and the Environment

It is essential to focus on one of the main Non-financial KPI people and the situation, people are those who work in the farm and whom we sell our goods and services. It’s essential to provide the better working environment to the peoples who work in the company and also offer the better quality products to the consumers. People will be able to perform KPI assessment and implementation of their own. Various factors can be in this measures like cleanliness, facilities, and competition, catering facilities, and health facilities.

♠ The Reputation of the Farm

In this non-financial KPI intangible asset can be measured like the brand reputation, skills, knowledge, company reputation and many more. This is important because of it clear to everyone where the company stands right now. It’s a challenge to put a financial number on brand reputation, and there is the various tool which helps you to monitor the brand reputation, cloud-based are the best who help to analyse and identify.

♠ Customer Satisfaction

Measuring customer satisfaction is very hard. The most popular KPI for measuring customer satisfaction is CSAT. In these, you can directly ask your customer to rate their satisfaction with your business, product or services. Your CSAT scale can consist out of regular numbers, but it could also include of stars, smiley faces, tiny unicorns etc. The organisation should organise customer satisfaction survey because customer satisfaction is a moving target, you must continually survey your customer to find out what it takes to satisfy them today, tomorrow and the next day.

Meeting customers commitment on time:- Meeting Customer commitment on time means earning client trust and delivering outstanding services on time. Customer commitment on time leaves a strong impression of brand or company on customers.

Research and Development:- Research and Development plays a critical role in the innovation process. It’s mostly an investment in technology and future capabilities which is transformed into new products, process, and services.

Manufacturing and production:- Manufacturing is a well-defined measurement to monitor, analyse, and optimise the production process regarding their quantity, quality as well as different cost aspects.


These all the non-financial KPI metrics which compute quantitative performance of the reliable company and individual. Gst software is one of the best software which helps small businessman to identify, analyse the balance sheet and income statement of the company.

Author Bio

Priyanshu Yadav

I am Priyanshu Yadav, an I.T. engineer and freelancer Seo Consultant. I am working with new entrepreneurs. Nowadays I am working with a new accounting software named Merrchant.

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