By: Jennifer Brazer
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Fact Checked By: Brittany McMillen
7 Most Important KPIs to Track as a Small Business
Imagine running your business like driving a car. Without your dashboard’s gauges and indicators, you’re flying blind, potentially heading straight for a breakdown. In the same way, tracking the right Key Performance Indicators (KPIs) allows you to see exactly where your small business stands and adjust your course—before it’s too late.
As the CEO of Complete Controller, I’ve spent over 15 years helping small business owners transform uncertainty into clarity and success by tracking the metrics that matter. Let me walk you through the seven small business KPIs you need to monitor right now for growth and sustainability.
Why KPIs Are Essential
KPIs aren’t just numbers—they are the story of your business in data form. Whether you’re struggling with cash flow or trying to increase customer loyalty, KPIs help you measure progress, find pain points, and pave the way toward growth. As I often tell my clients, “What you don’t measure, you can’t improve.”
The role of KPIs in driving success
- Actionable Insights: Want to know what’s working and what needs fixing? KPIs are your answer.
- Progress Tracking: A clear snapshot of where you are versus where you need to go.
- Proactive Problem-Solving: By identifying weaknesses early, you can adjust and avoid expensive missteps.
For an in-depth explanation of KPIs, check out this key performance indicators definition by Investopedia. Now, let’s dive into the numbers that can future-proof your business.
Financial KPIs: Your Business’s Lifeblood
Cash flow
Cash flow is the oxygen of your business. It measures how much money is coming in and going out, telling you whether you can cover expenses and invest in growth. Interestingly, 82% of businesses fail because of poor cash flow management, according to a Heartland study.
Pro Tip: Use cash flow tracking tools like QuickBooks or Xero. For more tips, check out our small business bookkeeping tips.
Revenue and profit margins
Revenue tells you how much you’re earning, while profit margins reveal whether your earnings make financial sense. As I’ve told countless small business owners, a glowing revenue figure is meaningless if your margins are razor-thin. One client discovered they were losing $1 per product sold—improving their pricing strategy saved the business.
Customer Satisfaction KPIs: Loyalty Matters
Customer retention rate
Retaining loyal customers costs far less than acquiring new ones and can boost profits by 25–95%, as shared by Optimoroute. Calculate retention by dividing repeat customers by total customers over a period.
Customer satisfaction score (CSAT)
Who wouldn’t want satisfied customers singing their praises? Ask them to rate their experience from 1–5 and aim for consistency. If your score hovers below 80%, it’s time to rethink processes.
Need help fine-tuning these metrics? See how to optimize customer service metrics.
Operational Efficiency KPIs: Maximize Productivity, Minimize Waste
Productivity metrics
Are your team’s efforts lining up with your business goals? Productivity metrics can include tasks completed daily or order processing times. Did you know automating repetitive tasks can boost productivity by 45%? It’s not just a stat—it’s common practice I encourage clients to adopt all the time.
Operational costs
Break down your costs—labor, materials, and fixed expenses—and take action to cut inefficiencies. For instance, automating inventory systems can drastically reduce duplicate efforts. Read more about improving your operations in our guide to mastering the cash conversion cycle.
Marketing Performance KPIs: Understand Your Campaigns
Website traffic
Your website is a silent sales representative. If it’s not bringing in visitors, you need to investigate. Free tools like Google Analytics tell you where traffic is coming from and how people interact with your content.
Conversion rates
A thousand website hits mean nothing without conversions. Calculate conversion rates by dividing actions (like sign-ups or purchases) by total traffic. Remember, the average conversion rate in e-commerce is just 2.86% (SimpleKPI). Anything higher? You’re ahead of the curve.
Employee Performance KPIs: Happy Employees, Thriving Business
Employee satisfaction
Unhappy employees can cost you. Employee satisfaction surveys are a quick way to gauge morale. Take a page from Whatfix’s book—their work-life balance initiatives led to a 25% spike in both productivity and satisfaction.
Employee productivity
High-performing employees are your business’s backbone. Track metrics like tasks completed or sales closed. Better yet, empower them with clear goals and the tools to succeed.
Inventory Management KPIs: Prevent Waste, Maximize Efficiency
Inventory turnover
How often are you clearing out and replenishing stock? A high turnover rate ensures you aren’t tying up cash in unsold products. For example, a turnover rate of 5 means you sell and replace inventory five times annually.
Stock levels
Too much inventory ties up money; too little loses sales. An app like Cin7 can help you keep a real-time grip.
Growth Metrics: Long-Term Indicators
Year-over-year growth
Revenue, customer count, and overall profit from one year to the next reveal where your business is headed. Companies that track and analyze their year-over-year growth often outperform their competitors (Heartland).
Market share
What percentage of the market are you capturing? Tracking this metric helps you understand how you’re stacking up against competitors. One bakery I worked with saw their market share expand by offering event-oriented catering services—small pivot, big payoff.
Conclusion
Tracking small business KPIs transforms unpredictability into strategic decision-making. By mastering financial KPIs, operational efficiency tools, and customer satisfaction scores, you’ll identify opportunities others overlook.
If you’re feeling overwhelmed by the process, remember, small steps lead to big wins. Start by tracking cash flow and customer retention, then build from there. For personalized help, my team at Complete Controller can get you on the right path.
Ready to unlock your business’s potential? Learn more here.
FAQ
What’s the first KPI a small business should track?
Cash flow. Without it, nothing else matters. Tools like QuickBooks will help track this daily.
How often should I review my KPIs?
Most businesses can check KPIs monthly. However, metrics like online traffic might need more frequent attention—weekly is ideal.
What should I do if a KPI isn’t improving?
Start by investigating the root cause. Break the problem into smaller components and test solutions step by step.
Can I track KPIs manually?
While possible, automation saves time and reduces errors. Affordable options like HubSpot or Asana make tracking easier.
Which marketing KPI should I prioritize?
Focus on conversion rates first. They directly reflect how well your site turns visitors into customers.
Sources
- Heartland. “10 KPIs small businesses should be tracking.” https://www.heartland.us/resources/blog/10-important-kpis-small-businesses-should-consider-tracking
- Optimoroute. “13 Essential Small Business Metrics to Track Performance.” https://optimoroute.com/small-business-metrics/
- SimpleKPI. “The Top 5 KPI Dashboard Templates for Small Businesses.” https://www.simplekpi.com/Blog/the-top-5-kpi-dashboard-templates-for-small-businesses
- Whatfix. “The Impact of Work-Life Balance on Employee Satisfaction and Productivity.” https://www.whatfix.com/blog/work-life-balance-employee-satisfaction-productivity/
- Thryv. “Customer Service Metrics: 10 to Measure at Your Small Business.” https://www.thryv.com/blog/customer-service-metrics/
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
