I’m a big fan of setting measurements and goals because if you don’t know where you’re going you can’t get there. But don’t let anyone sell you on a pre-built set of PKI’s. And definitely don’t buy a PKI app. There are many sources for sets of standard PKI’s that you could measure but you can hit them and still have a poorly run business. It’s not that they aren’t good to measure, it’s that they might not address the pain points in your business. You have to figure out what is important to you and let the goals you have for your business determine which metrics you want to track.
Here are a few of my favorite metrics
- Revenue per technician
- I set of goal of $300,000 and then track monthly progress toward that goal. What ever number you set should be at least 3 times the total cost of the employee.
- Percentage of revenue hitting the bottom line
- Many businesses don’t pay enough attention to the expenses of running a business or owners take out too much revenue from the company. The bottom line should be at 12-20% of total gross revenue. This leaves a healthy amount for reinvestment into growing the company.
- Excess capacity
- Can your business grow? Is there room to provide additional services or take on new clients without taking away from existing clients or over taxing your staff? These are critical questions.
- Is the flow of cash working for you? Are there any risk points or thin times?
- Knowing the amount of cash that your business requires every month to pay its bills is critical but knowing the rate of flow is even more important. There can be enough money coming in and you can still have difficulty paying bills because it doesn’t come in at the right time. Adjustments in policy can make these corrections.
- What does employee retention look like?
- It’s a poorly kept secret that employees don’t stay with a job for the money. They stay for the culture and the benefits. In an MSP, technical staff should stay for about 4 years with some staying longer. If you’re not hitting this metric your business likely has a culture or benefits problem.
- How many new customers are coming in?
- Customers will leave, due to no fault of your own. Even if you aren’t looking to grow, you still need a steady stream of new clients. What’s the plan and are you hitting those goals?
- Are your customers happy?
- It’s not whether your clients smile back at you, it’s if they show up for you. When you hold an event do they attend? When you deliver a gift are they delighted? Do they send you unsolicited compliments? Do they make referrals?
Progress toward your goals
I also like to track progress toward a goal. For example, when we decided to focus on Microsoft 365 technology, I tracked the percentage of clients migrated. Track this both as a project to be completed as well as in your chart of accounts. In the chart of accounts. Create a set of accounts so you can see how to this migration decision is impacting the bottom line and flow of funds.
Similarly, any time we made a change in technology we were using, like adding DMARC records, we also tracked that progress to the completion of that goal. Tracking these things lets you know how well your staff is able to stay on task and complete projects. The important thing is to align your metrics with your goals, track them regularly, and use them to improve your services and outcomes.
Don’t measure just to measure
One final thought don’t measure just to measure. Only track the things that are important to you. I have a key phrase that helps me every day, and it is “Do I really need to know that?” I wrote an article about what this means. With all of the tools we have available to us and all of the information that flows at us from every direction, deciding what to stop measuring can be just as important as measuring the important stuff.
Do you need to work on these things? Others just like you need to too and they have joined our Mastermind Group to improvement their business. Why not join too? We have groups for solo, small and larger MSPs.
