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Important KPIs for Small Businesses


Understanding the daily progress and drawbacks is extremely important for small businesses that are just new to the market. Some of the factors that are involved in understanding these scenarios are the metrics and key performance indicators or KPIs. KPIs for small businesses help them keep track of progress. Their progress will determine betterment whereas any drawback will help them understand their flaws and they might change their strategies for effective results.

By shedding light on the company’s progress, they help decide achievable long-term and short-term goals by giving a better understanding of a complete picture.

Moreover, these factors are extremely important for business owners for their growth as well as investment decisions.

COVID-19 has hit most of the businesses. These KPIs can help you decide the magnitude of it so that you can plan how to blog for your small business. For your help, we have listed productive ways to rebuild your small business, give it a read as well… But before that read this piece of information till the end to get the most out of it!

We have some of the most important KPIs for small businesses, let’s find:

What are KPIs?

If you are new to this whole thing, you need to understand the term itself before diving into the whole article.

In simple words, Key performance indicators are the metrics to your business and as referred to by the name itself these give the company an indication of where its performance is heading.

These are more or fewer insight digits to whether a company is progressing or is at risk of shutting down or going in a loss.

Small business owners should opt for their critical KPIs at a very early stage of their business and must establish a clear understanding of what numbers will mark success and what will determine loss.

Importance of KPIs:

As mentioned above, KPIs for small businesses are extremely important for their progress.

They act as growth indications for small businesses and sketch a well-defined map to how to meet their organizational goals and what strategies are performing well for them.

They are more than just mere numbers you report weekly, they help you understand the performance and health of your business and for you to make required amendments for better results.

This will give you a better overview of whether or not the company is headed in the right direction or needs immediate attention.

Important KPIs for Small Businesses:

Cutting the delay shot, here are some of the very important KPIs and growth indicators for small businesses that you must follow and opt for to get a better perspective:

These certain metrics are extremely vital for a small business in US:

Revenue Growth:

Revenue refers to the amount of money a business takes in for its sales or the services it provides before any expenses are taken out.

Also known as sales or top-line income, these are essential KPIs for the calculation of financial metrics.

There are several ways a small business can calculate its revenue. For instance, In accrual Accounting, customer purchases made on credit count toward revenue before the business has received payment.

Whereas, if we talk about cash accounting, only the money in the bank’s account will count as revenue

This average revenue per user will help small businesses understand how much revenue each customer or the subscriber of your service is generating for your business. Once you know this data, you can realize the value associated with adding or losing a customer.


Expenses generally refer to the cost a business must cover to operate and earn profit for itself. Always remember that a business needs more revenue to survive than it has expenses.

Expenses could be anything a business needs to grow such as labor, equipment, supplies, products, incentives, etc.

Similar to revenue, accrual accounting expenses are the factors even if they are incurred and not paid yet while cash accounting refers to those only which are paid.

These act as important KPIs for small businesses or growth indicators or small businesses as they indicate whether or not your expenses are larger than revenue, where are most of your money going and how can you reduce that. Our blog on cost reduction strategies for small businesses might interest you.

Net Income:

Another important growth indicator for small businesses is net income.

Net income is actually what a company profits once all expenses are paid off from the revenue.

Or in easy words, it is the money left over once expenses are subtracted from the revenue.

This is a clear indication of whether or not a company is progressing or not since a company needs to bring enough revenue to cover up its expenses.

If the net income is profitable once the expenses have been paid from the revenue it indicates the progress of a small business whereas if they are not it means the company is following in a loss.

Cash Flow:

Another important KPI for small businesses is the cash flow which is referred to as the backbone of small businesses.

This is the amount of money moving in and out of a particular business during a certain period. This helps businesses understand their position and acts as a growth indicator for small businesses.

For instance, if more cash is coming in than going out of the business it means it has a positive cash flow which ultimately indicates positive growth.

Website Visitors:

Traffic to your site is one of the growth indicators for small businesses as well. Not just visits but the behavior study of visitors is what can help you learn about them. You can see if your potential leads are visiting your site or the visitors are just not from your target audience. This shows your exposure to your target audience. You can find different tools like Google Analytics that have metrics of location, new visitors, returning visitors, and more.

Customers’ Feedbacks: The quickest of all!

Start valuing your customer reviews, responses, feedback, etc. This KPI can give you the quickest data analysis of where you are going well and where the problem lies. Moreover, you can learn what your customers are expecting from you and at what level you are satisfying them.

To get your feedback from your customers, you need to set ways where they can easily review your services. For example, add your company profile on QRG101 can help you get reviews. Ask your customers to share their valuable feedback by writing reviews here, while the customers who find you from our directory may review you even without asking.

These are some of the very important KPIs for small businesses that act as a growth indicator. Companies should carefully monitor these to check their progress.