Here’s what we’re talking about in this episode:
Introduction to KPIs: KPIs (key performance indicators) are quantifiable measures used to evaluate the performance and success of a business.
Importance of tracking KPIs: Without tracking KPIs, businesses operate blindly and make decisions based on feelings or hunches instead of actual data.
Vanity KPIs: Not all data is valuable and some KPIs, like followers on Instagram, may not translate to increased revenue. Focus on KPIs that drive growth.
Starting with financial performance KPIs: Michelle recommends starting with a few important financial performance KPIs, such as monthly revenue and revenue per member, to get a baseline understanding of the business.
Revenue per member: This KPI measures the average amount of money generated by a member each month and can help improve revenue by upselling or adding new services.
Revenue per square foot: This KPI measures the revenue generated per square foot of physical space and can help optimize utilization of the space to increase revenue.
Payroll as a percentage of revenue: Payroll should be no more than 30% of total revenue and tracking this KPI can help make informed decisions on hiring and class scheduling.