what is performance target in business plan

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Setting performance targets in your business

Published November 5, 2023

by brad dean

Director - Broking

Performance targets, commonly known as key performance indicators or KPIs , are an essential element of any  business plan .

KPIs are measures of the key drivers in your business and should link to those business levers that can be pulled to deliver an impact on business performance. Meeting these KPIs consistently moves the business towards achieving the goals detailed in your business plan.

Selecting the correct KPIs is the first step, then it is necessary to establish the targets that you want to achieve. For example, a manufacturer may select Gross Profit Margin [GP] as the KPI measure, and the performance target is 28.5% GP margin for the year.

It is important that these targets are formulated in a way that is understood and will resonate with your team to provide the motivation to deliver the desired outcomes.

A good way of analysing your KPIs, targets and business goals is against the SMART criteria:

What exactly do you want to achieve, be precise and clear about what you want to achieve.

What is it, where, how much, how and with who.

m-easurable

You must be able to accurately measure the performance and your progress towards the goal.

Measuring your progress keeps you on track towards the goals that you have established within your business plan.

a-chievable

It’s ok to set ‘stretch’ targets but it is pointless setting targets that cannot be achieved, this is demoralising. Goals and targets need to be ‘agreed’ by the team so that expectations are clear.

Your performance measures and targets must be relevant to the goals set in your business plan. There is little point in measuring the performance of something that is not aligned with your overall objectives.

t-ime based and timely

Your KPIs need to be time-based, that is you will achieve the outcome within a defined period, open-ended goals don’t work. Measuring the performance needs to occur on a timely basis to be relevant and allow for effective decision making.

Here are a couple of KPI examples from a manufacturing business plan:

Gross Profit margin of 29.5% for FY 2021 compared with 28.7% in FY 2020.

This is specific, measurable, achievable based on the prior year results, relevant as it’s a key profit driver and has a clearly defined time period. This KPI would link directly to other measures of the production process like rework, waste and direct labour hours. Together, they combine to provide greater control over this part of the business.

Compare this to:

Increase product quality to above 95%.

You might look at this and think that other than no time target it looks ok. However, it is not specific. How is quality measured, what are the drivers of quality in the process, are they currently measured and if not, can it be done cost-effectively? Is this level achievable based on the current performance rate, if known? You can see that this KPI raises more questions than it answers and will not assist you to make better business decisions.

Reviewing your performance targets and goals against SMART criteria helps to:

• Set clear performance expectations for your team
• Engage your team with a set of agreed targets and goals
• Identify areas where performance can be improved
• Allows you to easily assess progress towards your goals

When teams know what is expected of them and are engaged, they are well on their way to achieving the goals and objectives set out in your business plan.

Need a hand with performance measurement, planning in your business or business advice ? Please feel free to reach out, I’d love to help.

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Measure performance and set targets

A growing business needs to be closely and carefully managed to ensure the success of new investment decisions and expansion plans. However, many owner-managers find that as their business grows they feel more remote from its operations.

Putting performance measurement systems in place can be an important way of keeping track on the progress of your business. It gives you vital information about what's happening now and it also provides the starting point for a system of target-setting that will help you implement your strategies for growth.

This guide sets out the business benefits of performance measurement and target-setting. It shows you how to choose which key performance indicators (KPIs) to measure and suggests examples in a number of key business areas. It also highlights the main points to bear in mind when setting targets for your business.

The importance of measurement and target-setting

Deciding what to measure, measurement of your financial performance, measurement and your customers, measurement and your employees, measurement against other businesses - benchmarking, measurement in the manufacturing sector, how to set useful targets for your business.

Performance measurement and target-setting are important to the growth process. While many small businesses can run themselves quite comfortably without much formal measurement or target-setting, for growing businesses the control these processes offer can be indispensable.

The benefits of performance measurement

Knowing how the different areas of your business are performing is valuable information in its own right, but a good measurement system will also let you examine the triggers for any changes in performance. This puts you in a better position to manage your performance proactively.

One of the key challenges with performance management is selecting what to measure. The priority here is to focus on quantifiable factors that are clearly linked to the drivers of success in your business and your sector. These are known as key performance indicators (KPIs). See the page in this guide on deciding what to measure.

Bear in mind that quantifiable isn't the same as financial. While financial measures of performance are among the most widely used by businesses, nonfinancial measures can be just as important.

For example, if your business succeeds or fails on the quality of its customer service, then that's what you need to measure - through, for example, the number of complaints received. For more information about financial measurement, see the page in this guide on measurement of your financial performance.

The benefits of target-setting

If you've identified the key areas that drive your business performance and found a way to measure them, then a natural next step is to start setting performance targets to give everyone in your business a clear sense of what they should be aiming for.

Strategic visions can be difficult to communicate, but by breaking your top level objectives down into smaller concrete targets you'll make it easier to manage the process of delivering them. In this way, targets form a crucial link between strategy and day-to-day operations.

Getting your performance measurement right involves identifying the areas of your business it makes most sense to focus on and then deciding how best to measure your performance in those areas.

Focusing on key business drivers

Your performance measurement will be a more powerful management tool if you focus on those areas that determine your overall business success.

This will vary from sector to sector and from business to business. So put some time into developing a strategic awareness of what it is that drives success for businesses like yours.

It's crucial that you tailor your measurement to your specific circumstances and objectives. A manufacturer producing and selling low-cost goods in high volume might focus on production line speed, while another producing smaller quantities using high-cost components might focus instead on reducing production line errors that result in defective units.

Finding your specific measures

Once you have identified your key business drivers, you need to find the best way of measuring them. Again, your priority here should be to look for as close a link as possible with those elements of your performance that determine your success.

For example, you may decide that customer service is a strategic priority for your business and to therefore start measuring this. But there are many ways of doing so.

You might consider measuring:

• the proportion of sales accounted for by returning customers
• the number of customer complaints received
• the number of items returned to you
• the time it takes to fulfil an order
• the percentage of incoming calls answered within 30 seconds

None of these is necessarily better than any other. The challenge is to find which specific measure (or measures) will enable you to improve your business.

This type of measurement unit is often referred to as a key performance indicator (KPI). The two key attributes of a KPI are quantifiability (i.e. you must be able to reduce it to a number) and that it directly captures a key business driver. See the page in this guide on choosing and using key performance indicators.

Using standardised measures

There are standardised performance measures that have been created which almost any business can use. Examples include balanced scorecards, ISO standards and industry dashboards.

Choosing and using key performance indicators

Key performance indicators (KPIs) are at the heart of any system of performance measurement and target-setting. When properly used, they are one of the most powerful management tools available to growing businesses.

Selecting KPIs

There are a number of key criteria that your KPIs should meet:

• First, they should be as closely linked as possible to the top-level goals for your business. See the page in this guide on deciding what to measure.
• Second, your KPIs need to be quantifiable. If you can't easily reduce your measurement to a number, there will be too much scope for variation and inconsistency if different people carry out the measurements at different times.
• Third, your KPIs should relate to aspects of the business environment over which you have some control. For example, interest rates may be a crucial determinant of performance for a given business, but you can't use the Bank of Canada base rate as a KPI because it's not something that businesses have any power to change. By contrast, a business' exposure to fluctuations in interest rates can be controlled and so this might make a useful KPI.

Getting the most from your KPIs

The purpose of performance measurement is ultimately to drive future improvements in performance. There are two main ways you can use KPIs to achieve this kind of management power.

The first is to use your KPIs to spot potential problems or opportunities. Remember, your KPIs tell you what's going on in the areas that determine your business performance. If the trends are moving in the wrong direction, you know you have problems to solve. Similarly, if the trends move consistently in your favour, you may have greater scope for growth than you had previously forecast.

The second is to use your KPIs to set targets for departments and employees throughout your business that will deliver your strategic goals. For more information about using target-setting to implement your strategic plans, see the page in this guide on how to set useful targets for your business.

Managing your information

As with most areas of your business operations, the more detailed and well structured the information you keep about your KPIs is, the easier it will be to use as a management tool. Computer-based management information systems are available for this purpose.

Getting on top of financial measures of your performance is an important part of running a growing business.

It will be much easier to invest and manage for growth if you understand how to drill into your management accounts to find out what's working for your business and to identify possible opportunities for future expansion.

Measuring your profitability

Most growing businesses ultimately target increased profits, so it's important to know how to measure profitability. The key standard measures are:

• Gross profit margin - this measures how much money is made after direct costs of sales have been taken into account, or the contribution as it is also known.
• Operating margin - the operating margin lies between the gross and net (see below) measures of profitability. Overheads are taken into account, but interest and tax payments are not. For this reason, it is also known as the EBIT (earnings before interest and taxes) margin.
• Net profit margin - this is a much narrower measure of profits, as it takes all costs into account, not just direct ones. So all overheads, as well as interest and tax payments, are included in the profit calculation.
• Return on capital employed (ROCE) - this calculates net profit as a percentage of the total capital employed in a business. This allows you to see how well the money invested in your business is performing compared to other investments you could make with it, like putting it in the bank.

Other key accounting ratios

There are a number of other commonly used accounting ratios that provide useful measures of business performance. These include:

• liquidity ratios, which tell you about your ability to meet your short-term financial obligations
• efficiency ratios, which tell you how well you are using your business assets
• financial leverage or gearing ratios, which tell you how sustainable your exposure to long-term debt is

Bear in mind that even though you are likely to use an increasing number of financial measures as your business grows, one of the most familiar – cash flow - remains of fundamental importance.

Cash flow can be a particular concern for growing businesses, as the process of expansion can burn up financial resources more quickly than profits are able to replace them.

Finding and retaining customers is a crucial task for every business. So when looking for areas of your business to start measuring and analysing, it's worth asking yourself if you know as much as possible about your clientele.

See your business through your customers' eyes

Looking at things from your customers' perspective can help you avoid getting sidetracked as you consider your options for growth.

Feedback is key - the more you know about what your customers think and want, the easier it will be to cater for growing numbers of them. Look for as many ways of capturing this information as possible, including:

• sales data - what your customers choose to buy (or not to buy) provides the clearest indication of their preferences
• complaints - but remember that many customers will simply switch suppliers before making a complaint
• questionnaires and comment cards - a very useful source of information, so consider using incentives to encourage more customers to complete them
• mystery shopping - having someone pose as a customer for research purposes can give a very clear sense of how well you are performing

Manage customer information and relationships

Software for customer relationship management (CRM) can be a powerful tool for capturing and analysing information about your customers and the products and services they purchase.

CRM also enables you to push up service levels by ensuring that all customer-facing staff have ready access to each customer's history.

Widen your focus beyond current customers

Selling more to existing customers might be the easiest way of increasing sales, but most businesses aiming for significant growth will need to find ways of reaching new groups of customers.

So knowing more about sections of the market you haven't yet tapped is crucial.

As your business grows the number of people you employ is likely to increase. To keep on top of how your staff are doing, you may need to find slightly more formal ways of measuring their performance.

Measuring through meetings and appraisals

Informal meetings and more formal appraisals provide a very practical and direct way of monitoring and encouraging the progress of individual employees. They allow frank exchanges of views by both sides and they can also be used to drive up productivity and performance through setting employee targets and measuring progress towards achieving them.

Regular staff meetings can also be a very useful way of keeping tabs on wider developments across your business. These meetings often give an early indicator of important concerns or developments that might otherwise take some time to come to the attention of your management team.

Quantitative measurement of employee performance

Looking at employee performance from a financial perspective can be a very valuable management tool. At the level of reporting for the overall business, the most commonly-used measures are sales per employee, contribution per employee and profit per employee. These measures shouldn't be thought of as an alternative to the broader appraisals outlined above, but can flag up issues that might later be explored in more detail in those meetings.

Expressing employee performance quantitatively is easier for some sectors and for some types of worker. For example, it should be quite easy to see what kind of sales an individual sales person has generated, or how many units manufacturing employees produce per hour at work.

But with a bit more effort, these kinds of measures can be applied in almost any business or sector. For example, using timesheets to assess how many hours an employee devotes each month to different projects or customers under their responsibility gives you a way of assessing what the most profitable use of their time is.

Benchmarking is a valuable way of improving your understanding of your business performance and potential by making comparisons with other businesses.

Who to benchmark against

It is usually helpful to compare yourself against businesses in the same sector. But your market position and your objectives, among other things, will affect the specific comparisons you want to make.

For example, a small business in a crowded sector may want to benchmark itself against average performance levels in the sector. But a business targeting rapid and significant growth may choose comparisons with an established market leader.

You can also benchmark internally within your business. For example, comparing absenteeism rates between departments may enable you to spread good working practices from the best-performing areas of your business.

What to benchmark

In general, the same rule applies to benchmarking as to choosing which performance measures to use. You should focus on those areas that drive business success in your sector - your key drivers. See the page in this guide on deciding what to measure.

How to benchmark

You should have ready access to all the figures for your own business, so the main challenge with benchmarking is often the process of finding external data for your comparisons.

There are a number of sources for this kind of information:

• Your trade association is a useful starting point, as these organisations often collate sector-wide statistics.
• Commercial market reports may provide greater detail, although these can be costly.

Using your benchmarking data

Benchmarking data should be used in the same way as any other performance measurement data you generate - as a spur to improve the way your business operates.

Typically this will involve setting targets to help you reach the benchmark values you aspire to. For more information on target-setting, see the page in this guide on how to set useful targets for your business.

The manufacturing sector is one in which there is significant scope for performance measurement, as most aspects of the production process can be accurately measured in quantitative terms.

An indication of the way manufacturers can measure their performance is provided by the Quality-Cost-Delivery (QCD) system. This comprises seven key measures which between them capture some of the key drivers of most manufacturing operations.

The seven QCD measures are:

• Not right first time (NRFT) - this is a measure of the rate of defective units being produced. The higher it goes, the greater the waste of resources and the greater the risk that customers will be inconvenienced.
• Stock turns (ST) - this gauges the number of times a business sells and replaces its inventory. Higher stock turn rates indicate that a business is operating efficiently and not tying up resources in slow-moving inventory.
• Overall equipment effectiveness (OEE) - this is a way of measuring whether you're making the most of a piece of machinery. It combines three elements - the amount of time the machine can be used, the rate at which it is operated and the proportion of its output that is defective.
• People productivity (PP) - this measures the number of worker hours taken to produce each unit of output. However, PP also distinguishes between valuable and wasteful production - this to ensure that productivity figures aren't skewed by the overproduction of units for which there's no customer demand.
• Floor space utilisation (FSU) - this measures the level of revenue generated per square metre of factory floor space. It reflects how efficient a business is at minimising its fixed costs.
• Delivery schedule achievement (DSA) - this measures your success at delivering the goods your customers have ordered to the schedule you have promised them.
• Value added per person (VAPP) - this measures the amount of value the manufacturing process adds to raw materials and compares it to the number of people involved in the process. Like PP above, it is a measure of employee productivity.

It is just a small step from measuring your performance to the much more dynamic process of driving up performance levels across your business. This involves setting performance targets in the key areas that drive your business performance.

For more information about these business drivers, see the page in this guide on deciding what to measure.

Key performance indicators (KPIs), targets and business strategy

Performance targets are a powerful management tool that can help you deliver the kind of strategic changes that many growing businesses need to make. The top-level objectives of your strategic plan can be implemented through departmental goals, and setting targets based on KPIs is an ideal way of doing this.

For example, a company seeking to expand on the basis of its product design capabilities might target year-on-year increases in the number of patents it secures, of new products it launches, or of its licensing income. The specifics will depend on which KPIs best capture the dynamics in the market.

Setting SMART targets

It's a familiar acronym, but a very useful one - your targets should be SMART - specific, measurable, achievable, realistic and time-bound:

• Using KPIs ensures your targets will meet the first two criteria, as all KPIs should, by definition, be specific and measurable. For more information about KPIs, see the page in this guide on choosing and using key performance indicators.
• Achievable - you need to set ambitious targets that will motivate and inspire your employees, but if you set the bar too high you risk deflating and discouraging them instead. Look back at your performance data for recent years to get a sense of what kind of performance boosts you've seen before - this will give you a sense of what is feasible.
• Realistic - setting realistic targets means being fair on the people who will have to reach them. Make sure you only ask for performance improvements in areas that your staff can actually influence.
• Time-bound - people's progress towards a goal will be more rapid if they have a clear sense of the deadlines against which their progress will be assessed.

Assigning responsibility and resources

Once you have identified the targets based on your KPIs that you believe will deliver the strategic growth you're aiming for, make sure you follow through by assigning clear responsibility for delivering each of them.

It is fine for your top-level strategic objectives to be abstract and business-wide, but your KPI targets should be concrete and clearly owned by a department or individual.

Hitting your targets is unlikely to be a cost-free process, so be ready to make the necessary resources available when needed. Also, undertake regular reviews to assist with motivation and to make changes if the progress made isn't as expected.

Original document, Measure performance and set targets , © Crown copyright 2009 Source: Business Link UK (now GOV.UK/Business ) Adapted for Québec by Info entrepreneurs

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How to Measure Your Business Performance

• 14 Nov 2023

Measuring your business’s performance is essential to its long-term success. By assessing its operations, you can make informed decisions, find ways to improve, and establish accountability in the workplace .

Despite these benefits, many businesses struggle to use the vast amounts of data they have access to. According to a report by data storage company Seagate , businesses act on just 32 percent of the data available to them—with the remaining 68 percent going unleveraged.

If you want to help your organization achieve its strategic objectives, here’s why it’s vital to measure business performance and how to do it.

Access your free e-book today.

Why Measure Your Business Performance?

Measuring business performance is critical to ensuring effective strategy formulation and implementation . It can also help identify obstacles and setbacks that impact your company’s success—similar to risk management .

According to the online course Strategy Execution , performance measurement comprises the formal, information-based routines and procedures managers use to maintain or alter patterns in organizational activities.

Engaging in performance measurement helps you and organizational leaders , investors, and employees understand how your roles and responsibilities relate to your business’s strategy—creating a culture of accountability and commitment to achieving its goals and objectives .

How to Measure Business Performance

Long-term business success doesn’t just result from effective strategy execution; it also relies on a holistic approach to monitoring, measuring, and evaluating performance. This involves creating objective and subjective measures—often called key performance indicators (KPIs) .

While objective measures—like revenue and profit margin—are crucial to assessing performance, subjective measures are often overlooked.

“If a measure is objective, you can independently verify it,” says Harvard Business School Professor Robert Simons, who teaches Strategy Execution . “You and I could look at the same set of data and draw the same conclusion. A subjective measure, by contrast, requires judgment.”

For example, measuring employee engagement can help gauge the amount of internal support for your business strategy. High employee engagement can also greatly impact your company’s bottom line—increasing profitability by up to 23 percent .

“These measures work well only when there's a high degree of trust between employees and managers,” Simons says in Strategy Execution . “Employees must feel confident that subjective measures are applied fairly.”

Using diagnostic control systems —information systems managers use to monitor organizational outcomes and correct negative performance—you can ensure consistency and standardization when measuring success.

Examples of diagnostic control systems include:

• Performance scorecards
• Project monitoring systems
• Human resources systems
• Standard cost-accounting systems

Before implementing such systems and measuring your business performance, here are three factors to consider.

3 Considerations When Measuring Business Performance

1. financial goals.

Measuring business performance starts with financial goals. This is largely because your company’s financial value is its first indicator of success or failure. Financial goals also help ensure your diagnostic control systems effectively monitor profitability and provide insight into how to fix problems.

To set financial goals, you can use a profit plan —a summary of a specific accounting period’s anticipated revenue inflows and expense outflows—presented in the form of an income statement . Profit plans serve several purposes; their most important is creating control systems that place responsibility on management.

“Individual managers can be held accountable for achieving specific revenue and expense targets and the overall profitability of the business,” Simons says in Strategy Execution .

To confirm that your profit plan holds you and others accountable for your organization’s financial health , Simons suggests asking the following:

• Does the business create enough profit to cover costs and reinvest in future endeavors?
• Does the business generate enough cash to remain solvent through the year?
• Does the business create sufficient financial returns for investors?

“Once managers have completed the profit planning process,” Simons says, “people throughout the organization will be in agreement about the direction of the business and the assumptions that underpin the forecasts.”

Related: 7 Financial Forecasting Methods to Predict Business Performance

2. Non-Financial Goals

While financial metrics are critical to assessing short-term profitability, non-financial goals can impact your business’s long-term success.

Objectives like improving customer satisfaction, boosting employee engagement, and enhancing ethical practices can all drive business performance—even financially.

“An organization that's focused just on financial goals will rarely achieve those goals for a long period of time,” says Tom Polen, CEO and president of medical technology company Becton Dickinson, in Strategy Execution . “It's all the other goals that are going to feed into the financial goals.”

In the course, Polen says he consistently communicates his organization’s strategic objectives to employees and uses an incentivization system to reward those working to support non-financial goals.

“As a health care provider, the most important thing—bar none—is quality,” Polen says. “While we’re focused on financial goals, our quality goals—which cut across manufacturing, regulatory, marketing, and medical—contribute to making sure that we have quality products at the end of the day. And we’ll never sacrifice a quality goal for a financial goal.”

3. Intangible Assets

Your goals aren’t the only thing you can use to measure your company’s performance. Intangible assets—non-physical assets your business significantly values—can also help.

Examples of intangible assets include:

• Research capabilities
• Brand loyalty
• Customer relationships

“These are among the most valuable assets in many of today's businesses,” Simons says in Strategy Execution . “But you won't find them anywhere on an income statement or balance sheet .”

Since you can’t monitor these assets using traditional accounting systems, you can instead use a balanced scorecard —a tool designed to help track and measure non-financial variables.

“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” Simons says in Strategy Execution . “These additional perspectives help businesses measure all the activities essential to creating value.”

For example, if your business strategy focuses on improving an intangible asset, like brand loyalty, you can use a balanced scorecard to track customer satisfaction through surveys and reviews.

In this way, the balanced scorecard offers a comprehensive view of business performance, helping you make informed decisions to protect and enhance intangible assets’ value.

Start Measuring Your Business Performance

Measuring business performance doesn’t have to be difficult. By implementing the appropriate metrics and control systems, you can seamlessly track strategic initiatives’ progress.

By enrolling in an online course, such as Strategy Execution , you can be immersed in a dynamic learning experience featuring real-world examples of businesses that have employed performance measurement strategies to secure long-term success.

Do you need help measuring your business performance? Explore Strategy Execution —one of our online strategy courses —and download our e-book to discover how to think like a top strategist.

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Kpi meaning + 27 examples of key performance indicators.

As your organization begins to sketch out what your strategic plan might look like, it’s likely to come to your attention that you’ll need to gain consensus around what your key performance indicators will be and how they will impact your organization. If you haven’t thought much about your KPIs yet, that’s okay. We can help!

We’ve compiled a complete guide that includes an overview of what makes a good KPI, the benefits of good key performance indicators, and a list of KPI examples [organized by department and industry] for your reference as you run your strategic planning process to build your organization’s strategic plan and goals.

Video Transcript – How to Write KPIs

Hi, my name is Erica Olsen. Today’s whiteboard video is on key performance indicators, or KPIs for short. These are those things that are associated with either goals or objectives, whatever you’re calling them, those elements of your plan that are the expressions of what you want to achieve by when those quantifiable outcome-based statements.

So KPI’s answer the quantifiable piece of your goals and objectives. They come in three different flavors. So we’ll talk about that in just a minute. But before we do, putting great measures together and making sure they work well for you, you need to have these four attributes. And before I talk about those four attributes, so I just want to say the reason they need to work well for you is because KPIs are the heartbeat of your performance management process. They tell you whether you’re making progress, and ultimately, we want to make progress against our strategy. So KPIs are the thing that do that for us. So you’re going to live with them a lot. So let’s make sure they’re really good.

Okay, so the four things you need to have in order to make sure your these measures work for you.

Our number one is your measure. So the measure is the verbal expression very simply, in words, what are we measuring, which is fairly straightforward. The tricky thing is, is we need to be as expressive as we possibly can with our measures. So number of new customers, that’s fine. There’s nothing wrong with that. But a little bit advanced or a little bit more expressive, would be number of new customers this year, or number of new customers for a certain product or a certain service. So what is it is it? Yeah, so it is, so be really clear. And when it comes to measuring it on a monthly basis, you’re gonna want to be as clear as possible. So number of new customers, let’s say this year,

Number two, is our target, or target is the numeric value that we want to achieve. So a couple of things that are important about this is, the target needs to be apples to apples with when the goal date is set, or the due date is set. So we want to achieve 1000 new customers by the end of the year. This is your time frame. So the due date in the target works hand in hand. The other thing is the measure and the target need to work hand in hand. So it’s a number. So this is a number, this is a percentage, this is a percentage, you get the idea.

Third thing, we actually run a report on this data. So where is it coming from? Be clear about what the source is. Most organizations have all sorts of data sources, fragmented systems. So making sure you identify where this data is coming from will save you a lot of time.

And then frequency. So how often are you going to be reporting on this KPI, ideally, you’re running monthly strategy reviews to report on the progress of your plan, at least monthly, in which case we’d like to see monthly KPIs. So you got to be able to pull the data monthly in order to make that happen. That’s not always possible. But let’s try to get there. Certainly some organizations are weekly and others are daily, monthly is a good place to start. So frequency. Great.

So now we know the components that we need to have in place in order to have our KPIs. Here are some different types of KPIs that you might think about as you’re putting your plan together.

So there are just straight up raw numbers, I call these widget counting, there’s nothing wrong with widget counting, they don’t necessarily tell a story. And I’ll talk about how to make this tell a story in a minute. But this is just simply widget counting number of things.

The second thing is progress. So this is really often used, it’s great. We use this, which is expressed as percent complete percent complete of the goal, percent completed a project, whatever it might be, it’s a project type measure. It’s a good measure, if if you don’t have quantifiable measures, or you can’t get the data, and you just want to track the performance of the goal as it relates to action items being completed under it.

The third type of indicator is a Change Type Indicator, like percent increase in sales, making this better would be percent increase in sales compared to last year. And the idea is 22%. So you can see how that starts to be more expressive, and work with the target. So this serves to tell a little bit more of a story than this one does, right? And if you want to actually make your widget counting measures tell more of a story like this one does, you might change something like this to read percentage of new customers acquired compared to same time last year. So that’s an example.

Okay, so now we know what we have to have in place and kind of different types of measures to get our ideas flowing. Let’s talk about one thing that you might take your measure writing to the next level and that is think about the fact that there are leading and lagging measures so are leading and lagging indicators. So percent increase in sales or sales is a lagging indicator it occurred as an outcome. If you want to make sure that you’re on track ACC, you might have a KPI in place, which is telling us whether we’re going to hit that increase such as your pipeline, maybe number of leads, or the size of your pipeline. So we don’t want to over rotate on this necessarily, but we do want to make sure we have a combination of leading and lagging measures when we’re looking at our performance on a monthly basis.

So with that, that’s all we have for today. Hopefully you have what you need to write great KPIs for your organization. Happy strategizing. And don’t forget, subscribe to our channel.

What is a Key Performance Indicator KPI — KPI Definition

Key performance indicators, also called KPIs, are the elements of your organization’s plan that express the quantitative outcomes you seek and how you will measure success. In other words, they tell you what you want to achieve and by when.

They are the qualitative, quantifiable, outcome-based statements you’ll use to measure progress and determine if you’re on track to meet your goals or objectives. Good plans use 5-7 KPIs to manage and track their progress against goals.

DOWNLOAD THE FREE KPI GUIDE

KPI Meaning, and Why Do You Need Them?

Key performance indicators are intended to create a holistic picture of how your organization is performing against its intended targets, organizational goals, business goals, or objectives. A great key performance indicator should accomplish all the following:

• Outline and measure your organization’s most important set of outputs.
• Work as the heartbeat of your performance management process and confirm whether progress is being made against your strategy.
• Represent the key elements of your strategic plan that express what you want to achieve by when.
• Measure the quantifiable components of your goals and objectives.
• Measure the most important leading and lagging measures in your organization.

The Five Elements of a KPI

These are the heartbeat of your performance management process and must work well! Your plan’s strategic KPIs tell you whether you’re making progress or how far you are from reaching your goals. Ultimately, you want to make progress against your strategy. You’ll live with these KPIs for at least the quarter (preferably the year), so make sure they’re valuable!

Great strategies track the progress of core elements of the plan. Each key performance indicator needs to include the following elements:

• A Measure: Every KPI must have a measure. The best ones have more specific or expressive measures.
• A Target: Every KPI needs to have a target that matches your measure and the period of your goal. These are generally a numeric values you’re seeking to achieve.
• A Data Source: Each of these needs to have a clearly defined data source so there is no gray area in measuring and tracking each.
• Reporting Frequency: Different measures may have different reporting needs, but a good rule to follow is to report on them at least monthly.
• Owner: While this isn’t a mandatory aspect of your KPI statement, setting expectations of who will take care of tracking, reporting, and refining specific KPIs is helpful to your overall organizational plan.

Indicators vs. Key Performance Indicators

An indicator is a general term that describes a business’s performance metrics.

There can be several types of indicators a company may track, but not all indicators are KPIs, especially if they don’t tie into an organization’s overall strategic plan or objectives, which is a MUST!

Key Performance Indicators

On the other hand, a key performance indicator is a very specific indicator that measures an organization’s progress toward a specific company-wide goal or objective. We typically recommend you narrow down the KPIs your organization tracks to no more than 7. When you track too many goals, it can get daunting and confusing.

Pro Tip : You should only track the best and most valuable indicators that tie to your organization’s long-term strategic goals and direction.

Benefits of Good Key Performance Indicators

What benefits do key performance indicators have on your strategic plan, and on your organization as a whole? A lot of benefits, actually! They are extremely important to the success of your strategic plan as they help you track progress of your goals. Implementing them correctly is critical to success.

• Benefit #1: They provide clarity and focus to your strategic plan by measuring progress and aligning your team’s efforts to the organization’s objectives. They also show your measurable progress over time and create ways to track your organization’s continued improvement.
• Benefit #2: Key performance indicators create a way to communicate a shared understanding of success. They give your team a shared understanding of what’s important to achieve your long-term vision and create a shared language to express your progress.
• Benefit #3: They provide signposts and triggers to help you identify when to act. A good balance of leading and lagging key performance indicators allow you to see the early warning signs when things are going well, or when it’s time to act.

How to Develop KPIs

We’ve covered this extensively in our How to Identify Key Performance Indicators post. But, here’s a really quick recap:

Step 1: Identify Measures that Contribute Directly to Your Annual Organization-wide Objectives

Ensure you select measures that can be directly used to quantify your most important annual objectives.

PRO TIP: It doesn’t matter what plan structure you’re using – balanced scorecard, OKRs, or any other framework – the right KPIs for every objective will help you measure if you’re moving in the right direction.

Step 2: Evaluate the Quality of Your Core Performance Indicators

Select a balance of leading and lagging indicators (which we define later in the article) that are quantifiable and move your organization forward. Always ensure you have relevant KPIs. Having the right key performance indicators makes a world of difference!

Step 3: Assign Ownership

Every key performance indicator needs ownership! It’s just that simple.

Step 4: Monitor and Report with Consistency

Whatever you do, don’t just set and forget your goals. We see it occasionally that people will select measures and not track them, but what’s the point of that? Be consistent. We recommend selecting measures that can be reported upon at least monthly.

The 3 Common Types of KPIs to Reference as You Build Your Metrics

Key performance indicators answer the quantifiable piece of your goals and objectives . They come in three different flavors. Now that you know the components of great key performance indicators, here are some different ones that you might think about as you’re putting your plan together:

Broad Number Measures

The first type of KPI is what we like to call broad number measures. These are the ones that essentially count something. An example is counting the number of products sold or the number of visits to a webpage.

PRO TIP: There is nothing wrong with these, but they don’t tell a story. Great measures help you create a clear picture of what is going on in your organization. So, using only broad ones won’t help create a narrative.

Progress Measures

Progress key performance indicators are used to help measure the progress of outcomes . This is most commonly known as the “percent complete” KPI, which is helpful in measuring the progress of completing a goal or project. These are best when quantifiable outcomes are difficult to track, or you can’t get specific data.

PRO TIP: Progress KPIs are great, but your KPI stack needs to include some easily quantifiable measures. We recommend using a mixture of progress KPIs and other types that have clear targets and data sources.

Change Measures

The final type of KPI is a change indicator. These are used to measure the quantifiable change in a metric or measure. An example would be, “X% increase in sales.” It adds a change measure to a quantifiable target and is usually measured as a percentage increase in a given period of time.

The more specific change measures are, the easier they are to understand. A better iteration of the example above would be “22% increase in sales over last year, which represents an xyz lift in net-new business.” More expressive measures are better.

PRO TIP: Change measures are good for helping create a clear narrative . It helps explain where you’re going instead of just a simple target.

Leading KPIs vs Lagging KPIs

Part of creating a holistic picture of your organization’s progress is looking at different types of measures, like a combination of leading and lagging indicators. Using a mixture of both allows you to monitor progress and early warning signs closely when your plan is under or over-performing (leading indicator) and you have a good hold on how that performance will impact your business down the road (lagging indicator). Here’s a deep dive and best practices on using leading versus lagging indicators:

Leading Indicator

We often refer to these metrics as the measures that tell you how your business might/will perform in the future. They are the warning buoys you put out in the water to let you know when something is going well and when something isn’t.

For example, a leading KPI for an organization might be the cost to deliver a good/service. If the cost of labor increases, it will give you a leading indicator that you will see an impact on net profit or inventory cost.

Another example of a leading indicator might be how well your website is ranking or how well your advertising is performing. If your website is performing well, it might be a leading indicator that your sales team will have an increase in qualified leads and contracts signed.

Lagging Indicator

A lagging indicator refers to past developments and effects. This reflects the past outcomes of your measure. So, it lags behind the performance of your leading indicators.

An example of a lagging indicator is EBITA. It reflects your earnings for a past date. That lagging indicator may have been influenced by leading indicators like the cost of labor/materials.

Balancing Leading and Lagging Indicators

If you want to ensure that you’re on track, you might have a KPI in place telling you whether you will hit that increase, such as your lead pipeline. We don’t want to over-rotate on this, but as part of a holistic, agile plan, we recommend outlining 5-7 key performance metrics or indicators in your plan that show a mix of leading and lagging indicators. .

Having a mixture of both gives you both a look-back and a look-forward as you measure the success of your plan and business health. A balanced set of KPIs also gives you the data and business intelligence you need for making decision making and strategic focus. We also recommend identifying and committing to tracking and managing the same KPIs for about a year, with regular monthly or quarterly reporting cadence, to create consistency in data and reporting.

27 KPI Examples

Sales key performance indicators.

• Number of contracts signed per quarter
• Dollar value for new contracts signed per period
• Number of qualified leads per month
• Number of engaged qualified leads in the sales funnel
• Hours of resources spent on sales follow up
• Average time for conversion
• Net sales – dollar or percentage growth
• New sales revenue
• Growth rate
• Customer acquisition count
• Lead conversion rate
• Average sales cycle

Increase the number of contracts signed by 10% each quarter.

• Measure: Number of contracts signed per quarter
• Target: Increase number of new contracts signed by 10% each quarter
• Data Source: CRM system
• Reporting Frequency: Weekly
• *Owner: Sales Team
• Due Date: Q1, Q2, Q3, Q4

Increase the value of new contracts by $300,000 per quarter this year.

• Measure: Dollar value for new contracts signed per period
• Data Source: Hubspot Sales Funnel
• Reporting Frequency: Monthly
• *Owner: VP of Sales

Increase the close rate to 30% from 20% by the end of the year.

• Measure: Close rate – number of closed contracts/sales qualified leads
• Target: Increase close rate from 20% to 30%
• *Owner: Director of Sales
• Due Date: December 31, 2023

Increase the number of weekly engaged qualified leads in the sales from 50 to 75 by the end of FY23.

• Measure: Number of engaged qualified leads in sales funnel
• Target: 50 to 75 by end of FY2023
• Data Source: Marketing and Sales CRM
• *Owner: Head of Sales

Decrease time to conversion from 60 to 45 days by Q3 2023.

• Measure: Average time for conversion
• Target: 60 days to 45 days
• Due Date: Q3 2023

Increase number of closed contracts by 2 contracts/week in 2023.

• Measure: Number of closed contracts
• Target: Increase closed contracts a week from 4 to 6
• Data Source: Sales Pipeline
• *Owner: Sales and Marketing Team

Examples of KPIs for Financial

• Growth in revenue
• Net profit margin
• Gross profit margin
• Operational cash flow
• Current accounts receivables
• Operating expenses
• Average cost of goods or services
• Average account lifetime total value

Financial KPIs as SMART Annual Goals

Grow top-line revenue by 10% by the end of 2023.

• Measure: Revenue growth
• Target: 10% growt
• Data Source: Quickbooks
• *Owner: Finance and Operations Team
• Due Date: By the end 2023

Increase gross profit margin by 12% by the end of 2023.

• Measure: Percentage growth of net profit margin
• Target: 12% net profit margin increase
• Data Source: Financial statements
• *Owner: Accounting Department

Increase net profit margin from 32% to 40% by the end of 2023.

• Measure: Gross profit margin in percentage
• Target: Increase gross profit margin from 32% to 40% by the end of 2023
• Data Source: CRM and Quickbooks
• *Owner: CFO

Maintain $5M operating cash flow for FY2023.

• Measure: Dollar amount of operational cash flow
• Target: $5M average
• Data Source: P&L
• Due Date: By the end FY2023

Collect 95% of account receivables within 60 days in 2023.

• Measure: Accounts collected within 60 days
• Target: 95% in 2023
• Data Source: Finance
• Due Date: End of 2023

Examples of Customer Service KPIs

• Number of customers retained/customer retention
• Customer service response time
• Percentage of market share
• Net promotor score

Customer KPIs in a SMART Framework for Annual Goals

90% of current customer monthly subscriptions during FY2023.

• Measure: Number of customers retained
• Target: Retain 90% percent of monthly subscription customers in FY2023
• Data Source: CRM software
• *Owner: Director of Client Operations

Increase market share by 5% by the end of 2023.

• Measure: Percentage of market share
• Target: Increase market share from 25%-30% by the end of 2023
• Data Source: Market research reports
• Reporting Frequency: Quarterly
• *Owner: Head of Marketing

Increase NPS score by 9 points in 2023.

• Measure: Net Promoter Score
• Target: Achieve a 9-point NPS increase over FY2023
• Data Source: Customer surveys
• *Owner: COO

Achieve a weekly ticket close rate of 85% by the end of FY2023.

• Measure: Average ticket/support resolution time
• Target: Achieve a weekly ticket close rate of 85%
• Data Source: Customer support data
• *Owner: Customer Support Team

Examples of KPIs for Operations

• Order fulfillment time
• Time to market
• Employee satisfaction rating
• Employee churn rate
• Inventory turnover
• Total number of units produced or on-hand
• Resource utilization

Operational KPIs as SMART Annual Goals

Average 3 days maximum order fill time by the end of Q3 2023.

• Measure: Order fulfilment time
• Target: Average maximum of 3 days
• Data Source: Order management software
• *Owner: Shipping Manager

Achieve an average SaaS project time-to-market of 4 weeks per feature in 2023.

• Measure: Average time to market
• Target: 4 weeks per feature
• Data Source: Product development and launch data
• *Owner: Product Development Team

Earn a minimum score of 80% employee satisfaction survey over the next year.

• Measure: Employee satisfaction rating
• Target: Earn a minimum score of 80% employee
• Data Source: Employee satisfaction survey and feedback

Maintain a maximum of 10% employee churn rate over the next year.

• Measure: Employee churn rate
• Target: Maintain a maximum of 10% employee churn rate over the next year
• Data Source: Human resources and payroll data
• *Owner: Human Resources

Achieve a minimum ratio of 5-6 inventory turnover in 2023.

• Measure: Inventory turnover ratio
• Target: Minimum ratio of 5-6
• Data Source: Inventory management software
• *Owner: perations Department

Marketing KPIs

• Monthly website traffic
• Number of marketing qualified leads
• Conversion rate for call-to-action content
• Keywords in top 10 search engine results/organic search
• Blog articles published this month
• E-Books published this month
• Marketing campaign performance
• Customer acquisition cost
• Landing page conversion rate

Marketing KPIs as SMART Annual Goals

Achieve a minimum of 10% increase in monthly website traffic over the next year.

• Measure: Monthly website traffic
• Target: 10% increase in monthly website
• Data Source: Google analytics
• *Owner: Marketing Manager

Generate a minimum of 200 qualified leads per month in 2023.

• Measure: Number of marketing qualified leads
• Target: 200 qualified leads per month
• Data Source: Hubspot

Achieve a minimum of 10% conversion rate for on-page CTAs by end of Q3 2023.

• Measure: Conversion rate on service pages
• Target: 10%
• Due Date: End of Q3, 2023

Achieve a minimum of 20 high-intent keywords in the top 10 search engine results over the next year.

• Measure: Keywords in top 10 search engine results
• Target: 20 keywords
• Data Source: SEM Rush data
• *Owner: SEO Manager

Publish a minimum of 4 blog articles per month to earn new leads in 2023.

• Measure: Blog articles
• Target: 4 per month
• Data Source: CMS
• *Owner: Content Marketing Manager
• Due Date: December 2023

Publish at least 2 e-books per quarter in 2023 to create new marketing-qualified leads.

• Measure: E-Books published
• Target: 2 per quarter
• Data Source: Content management system

Bonus: +40 Extra KPI Examples

Supply chain example key performance indicators.

• Number of on-time deliveries
• Inventory carry rate
• Months of supply on hand
• Inventory-to-sales Ratio (ISR)
• Carrying cost of inventory
• Inventory turnover rate
• Perfect order rate
• Inventory accuracy

Healthcare Example Key Performance Indicators

• Bed or room turnover
• Average patient wait time
• Average treatment charge
• Average insurance claim cost
• Medical error rate
• Patient-to-staff ratio
• Medication errors
• Average emergency room wait times
• Average insurance processing time
• Billing code error rates
• Average hospital stay
• Patient satisfaction rate

Human Resource Example Key Performance Indicators

• Organization headcount
• Average number of job vacancies
• Applications received per job vacancy
• Job offer acceptance rate
• Cost per new hire
• Average salary
• Average employee satisfaction
• Employee turnover rate
• New hire training Effectiveness
• Employee engagement score

Social Media Example Key Performance Indicators

• Average engagement
• % Growth in following
• Traffic conversions
• Social interactions
• Website traffic from social media
• Number of post shares
• Social visitor conversion rates
• Issues resolved using social channel
• Social media engagement

Conclusion: Keeping a Pulse on Your Plan

With the foundational knowledge of the KPI anatomy and a few example starting points, it’s important you build out these metrics with detailed and specific data sources so you can truly evaluate if you’re achieving your goals. Remember, these will be the 5-7 core metrics you’ll live by for the next 12 months, so it’s crucial to develop effective KPIs that follow the SMART formula. They should support your business strategy, measure the performance of your strategic objectives, and help you make better decisions.

A combination of leading and lagging KPIs will paint a clear picture of your organization’s strategic performance and empower you to make agile decisions to impact your team’s success.

Need a Dedicated App to Track Your Strategic Plan with KPI Dashboards? We’ve got you covered.

The StrategyHub by OnStrategy is a purpose built tool to help you build and manage a strategic plan with KPIs. Run your strategy reviews with zero prep – get access to our full suite of KPI reports, dynamic dashboards for data visualization, access to your historical data, and reporting tools to stay connected to the performance of your plan. Get 14-day free access today!

Our Other KPI Resources

We have several other great resources to consider as you build your organization’s Key Performance Indicators! Check out these other helpful posts and guides:

• OKRs vs. KPIs: A Downloadable Guide to Explain the Difference
• How to Identify KPIs in 4 Steps
• KPIs vs Metrics: Tips and Tricks to Performance Measures
• Guide to Establishing Weekly Health Metrics

FAQs on Key Performance Indicators

KPI stands for Key Performance Indicators. KPIs are the elements of your organization’s business or strategic plan that express what outcomes you are seeking and how you will measure their success. They express what you need to achieve by when. KPIs are always quantifiable, outcome-based statements to measure if you’re on track to meet your goals and objectives.

The 4 elements of key performance indicators are:

• A Measure – The best KPIs have more expressive measures.
• A Target – Every KPI needs to have a target that matches your measure and the time period of your goal.
• A Data Source – Every KPI needs to have a clearly defined data source.
• Reporting Frequency – A defined reporting frequency.

No, KPIs (Key Performance Indicators) are different from metrics. Metrics are quantitative measurements used to track and analyze various aspects of business performance, while KPIs are specific metrics chosen as indicators of success in achieving strategic goals.

16 Comments

HI Erica hope your are doing well, Sometime Strategy doesn’t cover all the activities through the company, like maintenance for example may be quality control …. sure they have a contribution in the overall goals achievement but there is no specific new requirement for them unless doing their job, do u think its better to develop a specific KPIs for these department? waiting your recommendation

Thanks for your strategic KPIs

Hello Erica, Could you please clarify how to set KPIs for the Strategic Planning team?

Hi Diana, check out the whitepaper above for more insight!

Hello Erica, Could you please clarify, how to set the KPIs for the Strategic PLanning team?

exampels of empowerment kpis

I found great information in this article. In any case, the characteristics that KPIs must have are: measurability, effectiveness, relevance, utility and feasibility

How to write methodology guidelines for strategy implementation / a company’s review and tracking (process and workflow) for all a company’s divisions

support on strategizing Learning & Development for Automobile dealership

Could you please to clarify how to write the KPIs for the Secretary.

Check out our guide to creating KPIs for more help here: https://onstrategyhq.com/kpi-guide-download/

That’s an amazing article.

Could you please to clarify how to write the KPIs for the office boy supervisor

Could you please clarify how to write KPIs for the editorial assistant in a start up publishing company.

Kindly advice how I would set a kpi for a mattress factory

Comments Cancel

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Despite the emphasis on and progress in marketing performance measurement and management (MPM) over the past decade, research continues to show that the link between marketing and the business still needs to be stronger and clearer.

As a result, the pressure on marketing to show its impact on the business, demonstrate accountability, and communicate its value continues to intensify.

Marketers who use performance-management best-practices are best positioned to manage the pressure. Their organizations adopt and leverage several best practices, including creating a performance-measurement system, linking marketing to business outcomes, and intelligently setting performance targets that are relevant to the organization's objectives and outcomes.

Setting performance targets is a critical component in developing an MPM framework and system. Let's use an example to illustrate the concept of a performance target.

Which of the following marketing objectives is the most measurable and has a specific performance target?

• Build consideration among early adopters in the small to midsize business (SMB) segment.
• Increase referral rate of current Tier 1 customers by 40% by the end of the year.

If you selected the second, you are correct. Marketers who embrace performance management—the process of measuring the progress toward achieving key outcomes and objectives in order to optimize individual, group, or organizational performance—realize that setting performance targets is a key part of the process.

Performance management enables Marketing to transform into a performance-driven organization.

What characterizes a performance-driven marketing organization? Performance-driven organizations consistently demonstrate the following five traits:

• They establish and work from clear standards of performance and metrics.
• They align resources, policies, and practices around standards of performance.
• They track and report results against their performance standards.
• They use data and performance targets to drive continual improvement.
• They use analytics to facilitate fact-based decisions.

Difficulty in setting performance targets is one of the most common problems encountered on the MPM journey.

This article outlines the 10 steps for establishing performance targets to drive performance improvement, initiate a discussion about priorities, define direction, bring focus, improve alignment, and facilitate faster course adjustments.

Before we launch into how to approach setting performance targets, it makes sense to see where it fits in the MPM taxonomy. There are five measurement-oriented elements in the MPM taxonomy:

• Key performance indicators (KPIs)
• Performance targets

Here's a quick explanation of each element:

• An outcome is a consequence or an effect that you are trying to produce, such as "Achieve No. 1 market share in a particular segment within 24 months."
• An objective states what is to be achieved and when results are to be accomplished to produce the outcome. Each part of the organization may have an objective designed to help achieve the outcome. In this particular example, the marketing objective might be "Increase preference for our AB product among top share determiners in XYZ markets within nine months."
• The only difference between a metric and a KPI is that a KPI embodies a strategic objective and measures performance against that objective or outcome. In this example, the metric/KPI might be share of preference.
• A performance target represents a commitment to achieve a specific and better quality or level of performance over a specified time frame. It is used to evaluate performance achieved compared with performance expected.

For this example, a tactical program may be developed and implemented to generate qualified leads from a set of share determiners, so the performance target might be a range of some number of qualified leads per program.

Neglecting to set performance targets for their tactical programs is where many marketers fall short in their MPM efforts. Without a stake in the ground, any results reported, although useful, do not necessarily demonstrate that Marketing met its performance commitment.

If you decide to make setting performance targets a standard of excellence for your marketing organization, these 10 steps will help you set performance targets that you can meet:

• Have a clear, measurable outcome and objective. You need to know where you're headed and what you're aiming for.
• Define the time period for achieving the outcome and objective.
• Determine your performance baseline for effecting this type of outcome and objective. What have your programs historically been able to produce? If you can't use your own data to establish a baseline, consider using a benchmark from your industry.
• Identify the performance measures you need to improve. Remember, a performance target is about taking your performance to the next level. You want to set a target that demonstrates improvement but not one that sets you up to fail.
• Establish the purpose of the performance target. Be clear about what you are trying to improve.
• Assess whether you need intermediary or milestone targets. You may realize that there are some interim performance targets you need to achieve before you can reach your ultimate target.
• Chose the target value (e.g., some improvement in the number of qualified leads, in the average order value, or in the number of referrals that will convert to qualified leads, etc.).
• Develop an action plan to achieve the target.
• Implement your plan of action.
• Monitor, report, and evaluate.

If as a marketer you believe you can positively affect the outcome, and you can monitor and report on your progress against a target, then you should work hard to set performance targets as a way to demonstrate your ability to deliver results.

ABOUT THE AUTHOR

Laura Patterson is the president of VisionEdge Marketing. A pioneer in Marketing Performance Management, Laura has published four books and she has been recognized for her thought leadership, winning numerous industry awards.

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Künstliche Intelligenz in Unternehmen: Innovative Anwendungen in 50 erfolgreichen Firmen

Der Bestsellerautor und Geschäfts renommierter KI-Experte Bernard zeigt, wie sterben Technologie des maschinellen Lernens das von Unternehmen verändert. Das Buch bietet einen Überblick über einzelne Unternehmen, beschreibt das spezifische Problem und erklärt, wie KI die Lösung erleichtert. Jede Fallstudie bietet einen umfassenden Einblick, der einige technische Details wichtige Lernzusammenfassungen enthält. Marrs Buch ist eine aufschlussreiche und informative Untersuchung der transformativen Kraft der Technologie in der Wirtschaft des 21. Jahrhunderts.

Bernard Marr

Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity. He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations. He has a combined following of 4 million people across his social media channels and newsletters and was ranked by LinkedIn as one of the top 5 business influencers in the world.

Bernard’s latest books are ‘Future Skills’, ‘The Future Internet’, ‘Business Trends in Practice’ and ‘ Generative AI in Practice ’.

Bernard Marr ist ein weltbekannter Futurist, Influencer und Vordenker in den Bereichen Wirtschaft und Technologie mit einer Leidenschaft für den Einsatz von Technologie zum Wohle der Menschheit. Er ist Bestsellerautor von 20 Büchern, schreibt eine regelmäßige Kolumne für Forbes und berät und coacht viele der weltweit bekanntesten Organisationen. Er hat über 2 Millionen Social-Media-Follower, 1 Million Newsletter-Abonnenten und wurde von LinkedIn als einer der Top-5-Business-Influencer der Welt und von Xing als Top Mind 2021 ausgezeichnet.

Bernards neueste Bücher sind ‘Künstliche Intelligenz im Unternehmen: Innovative Anwendungen in 50 Erfolgreichen Unternehmen’

How Do You Set The Right Targets For Your Business? Here Are Some Top Tips

2 July 2021

Every business needs to set targets for success, but how do you set the right targets for your business? It starts with you setting the overall direction, determining where you want your company to go and documenting it in an easy-to-understand strategy summary. Once created, this document should be reviewed by your team throughout the year to be sure you’re on track to achieve milestones and goals.

Set the overall direction of where you want your company to go

“ Think little goals and expect little achievements. Think big goals and win big success.” – David Joseph Schwartz

The first step in setting the right targets for your business is to establish or review your company’s purpose (mission) and ambition (vision). Even if you have a purpose and ambition statement, it’s always a good idea to review them at least annually to see if they are still relevant to how your company has matured and where you want it to go. If not, it’s time to update them. And, if you never developed them, this is the perfect first step to setting the right targets. Be sure these statements are inspiring and precise. Everyone in your organisation needs to have a clear understanding of where they are heading if there is any chance of getting there.

Next, with purpose and ambition in mind, it’s time to create a simple one-pager that captures your company’s top-level plan, objectives and priorities. This will help your odds of being one of the 10% of companies to actually turn their strategic goals into results, because it will be easy for anyone in the company to read and understand what the priorities are, focus on what’s important, monitor and manage how the team is progressing toward those objectives.

A crucial part of any company’s plans and target setting process needs to include external changes that impact your business in the next year. Businesses are impacted by legislation such as the EU General Data Protection Regulation (GDPR) and new regulatory requirements may shift your strategy. There’s no doubt that Brexit, and similar decisions, will affect businesses operating with or in the UK.

Your Plan-on-a-Page should include:

Your purpose: Include your purpose (mission)—why your business exists—and ambition (vision)—what the organization wants to achieve in the future—statements.

Customer Goals: This should include goals around customers and target market – things like customer satisfaction or loyalty goals, market share growth, etc.

Finance Goals: Where you define how you will drive revenue growth, deliver profits, maintain cash flow and fund your strategy.

Operations Goals: This should include goals for the processes you need to do better internally, how and where you might want to improve efficiencies and expand your capabilities. Here you would also look at goals regarding partners or suppliers.

Resources Goals: Where you define the enabling goals around key resources such as people, IT systems, infrastructure as well as the company culture.

Competition and Risk Goals: While this is often overlooked on strategy documents, it’s important to be aware of external factors that might threaten your success and set goals to mitigate the risks and perform well relative to your competition.

Once you have mapped out your goals across these different parts  of your business(overall no more than 15 or so) you define individual measures and targets for each goal.

Set the right targets for your business with these tips

Every goal needs a number of key performance indicators and targets to measure and monitor success against. Here are some tips to keep in mind when you set targets:

1. Research teaches us that the most successful targets are those that are stretching but realistic and achievable.

2. In order to make them stretching, realistic and achievable you need to benchmark your targets. On a most basic level you can simply base line current performance levels, look at trends and then stretch your target accordingly. More sophisticated ways are to look for external comparisons, industry benchmarks and best practice standards to help set targets.

3. Every target needs a time reference, i.e. by when you want to achieve it. To improve customer satisfaction is not a great target. To improve customer satisfaction (measured by the NPS score) from 55 to 65 by the end of 2019 is better.

4. It is also a good idea to set different milestone targets for different time-frames, e.g. short-term (next quarter) and longer-term (next year, two or three).

Once your targets are set, there are a few more things to consider:

1.Make sure you establish an action plan on how you will achieve each of your targets and milestones.

2. Make sure you monitor the performance against your goals and targets on a regular basis.

3. Make sure you review and adjust your targets regularly to reflect changes in your performance as well as the external environment.

4. Finally, make sure you celebrate and reward the successful delivery of targets and goals.

It doesn’t matter what products or services you sell or whether your company is multinational giant or a small start-up, setting the right targets for your business is the way to stay focused, keeps your organisation advancing forward and sets your company up for success.

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Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity.

He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations.

He has a combined following of 4 million people across his social media channels and newsletters and was ranked by LinkedIn as one of the top 5 business influencers in the world.

Bernard’s latest book is ‘ Generative AI in Practice ’.

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Set the right performance targets: a 10-step target setting tool

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This tool is based on research by Professor Mike Bourne and Dr Monica Franco-Santos at the Centre of Business Performance, Cranfield School of Management and was adapted from The impact of performance targets on behaviours: a close look at sales force contexts, CIMA/ Cranfield School of Management, 2009.

Targets are frequently used as a motivational technique. Founded on well-established theories of achievement motivation, targets that are specific and perceived achievable can help to focus managerial action, encourage people to succeed

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About the Book

You may find this rather unbelievable, but many activities, especially marketing programs, lack performance targets. How can you declare success if you don’t have a target? Every function with an organization is asked to be accountable. Because Marketing often reflects a significant part of the organization’s budget, it

 is often under scrutiny for proving its value. Performance target setting is a distinguishing capability between best-in-class marketers and their colleagues .  Every function, and Marketing in particular, that utilizes performance management best practices intelligently set performance targets that are relevant to the

 organization’s objectives and outcomes.

We realize that setting targets is one of the most common problems encountered on the performance management journey. However, without a stake in the ground, any results reported, while useful, do not necessarily demonstrate that your function met its performance commitment. Without a targets it is just as easy for leadership to arbitrarily declare failure as it is for you and your team to declare success.

Being able to set a performance target for your work, initiative and/or objective is a critical component in developing your performance framework and system. The target you choose represents a commitment to achieve a specific and better quality or level of performance over a specified time frame. It is used to evaluate performance achieved compared to performance expected. For example, a performance target for a tactical activity may be generate a specific number of conversations with qualified customer targets at an upcoming event.  Setting a product adoption rate for a new product within a specific period of time after launch serves as another example. 

Buy Your Best-Practices Workbook

How to Set Targets You Can Meet

Follow these 10 steps to set targets you can meet.

• Have clear measurable outcomes and objectives. You need to know what where you’re headed and what you’ re aiming for.
• Define the time period for achieving these outcomes/objectives.
• Document your current performance for affecting this type of outcome and objective and assess whether it directly relateds to what you need to accomplish. Historically, what have your programs produced? If you can’t use your own data to establish a baseline, consider using a benchmark from your industry.
• Identify the performance measures you need to improve. Remember, a target is about taking your performance to the next level. You want to one that demonstrates improvement but not one that sets you up to fail.
• Establish the purpose of the performance target. Be clear about what you are trying to improve.
• Assess whether you need intermediary or milestone targets. You may find out that there are some interim performance targets you need to achieve before you can reach your ultimate target.
• Choose the target value. For example, some improvement in the number of qualified opportunities, or some improvement in the average order value, or some improvement in the number of referrals that will convert to qualified conversations, and so on. It’s often a good idea to use a range for your target value.
• Develop an action plan to achieve the target.
• Implement your plan of action.
• Monitor, Report and Evaluate.

Smart leaders understand the inherent value of setting targets.  Targets provide focus and direction.  Collaborate with your team to establish achievable targets. Secure support from the C-Suite for the process.  Ensure everyone agrees that acheiving the target demonstrates your functions contribution, impact and value.

This approach will ensure that the performance targets reflect how success will be measured. Take your Performance Journey to new heights with Accelance®

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Performance management: Why keeping score is so important, and so hard

Effective performance management is essential to businesses. Through both formal and informal processes, it helps them align their employees, resources, and systems to meet their strategic objectives. It works as a dashboard too, providing an early warning of potential problems and allowing managers to know when they must make adjustments to keep a business on track.

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Organizations that get performance management right become formidable competitive machines. Much of GE’s successful transformation under former CEO Jack Welch, for instance, was attributed to his ability to get the company’s 250,000 or so employees “pulling in the same direction”—and pulling to the best of their individual abilities. As Henry Ford said, “Coming together is a beginning; keeping together is progress; working together is success.”

Yet in too many companies, the performance-management system is slow, wobbly, or downright broken. At best, these organizations aren’t operating as efficiently or effectively as they could. At worst, changes in technologies, markets, or competitive environments can leave them unable to respond.

Strong performance management rests on the simple principle that “what gets measured gets done.” In an ideal system, a business creates a cascade of metrics and targets, from its top-level strategic objectives down to the daily activities of its frontline employees. Managers continually monitor those metrics and regularly engage with their teams to discuss progress in meeting the targets. Good performance is rewarded; underperformance triggers action to address the problem.

Where do things go wrong?

In the real world, the details of performancemanagement systems are difficult to get right. Let’s look at a few common pitfalls.

Poor metrics

The metrics that a company chooses must actually promote the performance it wants. Usually, it can achieve this only by incorporating several of them into a balanced scorecard. Problems arise when that doesn’t happen. Some manufacturing plants, for example, still set overall production targets for each shift individually. Since each shift’s incentives are based only on its own performance, not on the performance of all shifts for the entire day, workers have every incentive to decide whether they can complete a full “unit” of work during their shift.

If they think they can, they start and complete a unit. But if they don’t, they may slow down or stop altogether toward the end of the shift because otherwise all of the credit for finishing their uncompleted work would go to the following shift. Each shift therefore starts with little or no work in process, which cuts both productivity and output. A better approach would combine targets for individual teams with the plant’s overall output, so workers benefit from doing what they can to support the next shift as well as their own.

Poor targets

Selecting the right targets is both science and art. If they are too easy, they won’t improve performance. If they are out of reach, staff won’t even try to hit them. The best targets are attainable, but with a healthy element of stretch required.

To set such targets, companies must often overcome cultural barriers. In some Asian organizations, for example, missing targets is considered deeply embarrassing, so managers tend to set them too low. In the United States, by contrast, setting a target lower than one achieved in a previous period is often deemed unacceptable, even if there are valid reasons for the change.

Lack of transparency

Employees have to believe their targets encourage meaningful achievement. Frequently, however, the link between individual effort and company objectives is obscure or gets diluted as metrics and targets cascade through the organization. Different levels of management, in an attempt to boost their own standing or ensure against underperformance elsewhere, may insert buffers into targets. Metrics at one level may have no logical link to those further up the cascade.

In the best performance-management systems, the entire organization operates from a single, verified version of the truth, and all employees understand both the organization’s overall performance and how they contributed to it. At the end of every shift at one company in the automotive sector, all employees pass the daily production board, where they can see their department’s results and the impact on the plant’s performance. The company has linked the top-line financial metrics that shareholders and the board of directors care about to the production metrics that matter on the ground. Frontline employees can see the “thread” that connects their daily performance with the performance of their plant or business unit (Exhibit 1).

A senior leader at another manufacturer aligns the whole organization around a shared vision through quarterly town-hall meetings for more than 5,000 staff. Managers not only share the company’s financial performance and plant-specific results but also introduce new employees, celebrate work anniversaries, and recognize successful teams. Most important, if targets are missed, the senior leader acts as a role model by taking responsibility.

Lack of relevance

The right set of metrics for any part of a business depends on a host of factors, including the size and location of an organization, the scope of its activities, the growth characteristics of its sector, and whether it is a start-up or mature. To accommodate those differences, companies must think both top-down and bottom-up. One option is the hoshin-kanri (or policy-deployment) approach: all employees determine the metrics and targets for their own parts of the organization. Employees who set their own goals tend to have a greater sense of ownership for and commitment to achieving them than do those whose goals are simply imposed from above.

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Lack of dialogue.

Performance management doesn’t work without frequent, honest, open, and effective communication. Metrics aren’t a passive measure of progress but an active part of an organization’s everyday management. Daily shift huddles, toolbox talks, after-action reviews, and the like all help to engage team members and to maintain a focus on doing what matters most. Applying the “plan–do–check–act” feedback loop, based on pioneering research from Charles Shewhart and W. Edwards Deming, helps teams learn from their mistakes and identify good ideas that can be applied elsewhere. And in many high-performing companies, supervisors act as coaches and mentors. One-on-one sessions for employees demonstrate concern and reinforce good habits at every stage of career development.

Lack of consequences

Performance must have consequences. While the majority of employees will never face the relentless “win or leave” pressure typical of professional sports, weak accountability tells people that just showing up is acceptable.

Rewarding good performance is probably even more important than penalizing bad performance. Most companies have various kinds of formal and informal recognition-and-reward systems, but few do enough of this kind of morale building, either in volume or frequency. In venues from lunchroom celebrations to town-hall announcements, employee-of-the-month and team-achievement awards are invaluable to encourage behavior that improves performance and keeps it high. One COO at an industrial-goods company keeps a standing agenda item in the monthly business review for recognizing the performance of individuals and teams. Employees on the list may find a gift waiting at home to thank them (and their families) for a job well done.

Lack of management engagement

The words of Toyota honorary chairman Fujio Cho—“Go and see, ask why, show respect”—are now famous as basic lean-production principles. Yet in many companies, senior managers rarely visit plants except during periodic business reviews, and they appear on the shop floor only when a major new capital improvement is to be inspected.

Management interactions with frontline personnel are an extremely powerful performance-management tool. They send a message that employees are respected as experts in their part of the business, give managers an opportunity to act as role models, and can be a quick way to solve problems and identify improvements.

One company’s machinery shop, for example, had developed such a reputation for sloppiness and missed deadlines that managers suggested outsourcing much of its work. When a senior manager was persuaded to visit the workshop, he was appalled at the dirty, cluttered, and poorly maintained environment. Employees reported chronic underfunding for replacement parts and tools, and asked the manager what it would take to save their jobs. He told them to “clean up the shop and give me a list of what needs to be fixed.” Both sides lived up to their commitments, and in less than a year the shop became a reference case for efficiency within the company.

Building a strong performance-management system

The best companies build performance-management systems that actively help them avoid these pitfalls. Such systems share a number of characteristics.

Metrics: Emphasizing leading indicators

Too often, companies measure and manage performance through lagging indicators, such as compliance with monthly output or quality targets. By the time the results are known, it is too late to influence the consequences. The best companies track the same metrics—but also integrate their performance-management systems into critical process inputs. Industrial Internet technologies, such as the SCADA 1 1. Supervisory control and data acquisition. architecture and distributed-control systems, let manufacturing staff know within minutes (or seconds) about variations in performance, even in remote parts of a plant. That lets people react long before the variation undercuts output or quality.

Some changes require almost no investment in technology. At the end of each workday, for example, production and functional teams can complete a checkout form assessing how it went. A combination of quantitative and qualitative metrics and simple graphics (such as traffic lights and smiley faces) provides an easy, highly effective tool for identifying and correcting issues or problems before the next day’s work begins.

As performance-management systems evolve, the metrics they use will become more complex, incorporating continuous rather than discrete variables: “everyone showed up on time today” will become “the team achieved 93 percent on the schedule-performance index using 90 percent of the labor-performance index.” The extra detail better informs decisions such as whether to add more labor to meet a delivery date or to push out a schedule for delivery.

Sustainability: Standard work and a regular heartbeat

Regardless of changes to metrics and targets, the best companies keep the cadence of meetings and reviews constant, so they become an intrinsic part of the rhythm of everyday operations (Exhibit 2).

The emphasis on regular, standardized processes goes beyond explicit performance-management activities and extends deep into every aspect of a company’s operating models. Standard work, for example, is based on three simple rules. First, there should be a standard for all activities. Second, everyone must have the knowledge and ability to meet that standard. Finally, compliance with it must be monitored and measured.

In many functions, the business cycle forces a regular rhythm or cadence: the weekly payroll, the monthly accounting close, or the quarterly inventory review. Good companies take advantage of these requirements to define a few central metrics, such as cycle times and accuracy, thus driving continuous improvement across every function.

As part of a lean-manufacturing excellence program, one industrial-commodities company encourages employees to indicate “what went well today, what didn’t go well today, what management can do to help” on their productionarea boards every day. Supervisors collect the information on index cards and post them on a lean-idea board. Representatives of each function meet with the plant manager every morning and accept or reject the cards or return them for more information. Every accepted card gets an owner and timeline for completion. Company leaders estimate that the boards generate at least $2 million a year in cost savings or higher output—but the impact on employee morale and engagement is “priceless.”

The great re-make: Manufacturing for modern times

This 21-article compendium gives practical insights for manufacturing leaders looking to keep a step ahead of today’s disruptions.

A checklist or standard operating procedure that defines the steps and sequences for every key process usually enforces standard work. In employee onboarding, for example, one company noted that small details—assigning email addresses, telephone numbers, and software and hardware access—were especially important for retaining employees early in their tenures. A checklist is now at the front of each new hire’s personnel file, with a copy in the supervisor’s file. The performance reviews of supervisors now assess how well they handled the onboarding of new employees, and everyone who resigns completes a mandatory exit interview.

Continuous improvement: Standard work is for leaders too

Standard work is essential at all levels of an organization, including the C-suite and senior management in general. Standard work for leaders forces a routine that, while uncomfortable at first, develops expectations throughout an organization. It is those expectations, along with specific metrics, that ultimately drive predictable, sustainable performance.

One global resources company now requires managers to demonstrate that they spend 50 percent of their time on a combination of coaching their people and attending safety briefings, shift huddles, improvement reviews, and production meetings. To free up time, other meetings are scheduled only on one day a week— and conference rooms no longer have chairs.

Taking this approach even further, every autumn a field-services organization commits itself to a comprehensive, enterprise-wide calendar for the entire following year. The calendar sets dates for all conferences, monthly and quarterly management meetings, formal performance reviews, and succession-plan meetings, as well as training and development opportunities. All agendas are fixed, and all meetings are subject to strict time limits. There is little need for additional leeway because internal reporting follows tight guidelines for transparency and timeliness: financial results are published internally every month, while data on the performance of teams and units in meeting annual incentive-plan goals are updated and published monthly on bulletin boards.

Most industrial companies have access to rich data on the performance of their operations. The technological advances associated with increasing use of automation, advanced analytics, and connected devices mean that this resource constantly improves. But how can organizations best use their data? A crucial part of the answer is instant feedback loops, daily performance dialogues, and routine performance reviews. Maintaining the willingness and ability to hardwire these performance-management processes into the rhythm of daily work isn’t sexy—but over the long run, it’s the most effective route to real, sustainable performance improvements.

Raffaele Carpi is a partner in McKinsey’s Lisbon office , John Douglas is an alumnus of the Houston office , and Frédéric Gascon is a senior vice president of RTS and is based in the Montréal office .

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Although people often use the terms interchangeably, goals and targets have important differences. Business goals are written parts of a long-term vision detailing what results your company aims to accomplish and by what deadline. Targets are similar but can be considered smaller, interim steps towards a goal that are aligned with the details and deadlines of larger goals. As individuals and teams within the organization reach their targets, the organization makes progress and brings ultimate goals into clearer focus.

Use Your Vision to Set Goals

With the right vision statement that accurately conveys your ultimate company plan for the future, your goals should come directly from your vision, according to a United Nations article on transportation visions and goals. Let's say your vision statement is to become a household name whose products set the standard for solving home owners' biggest problems. You don't become a household name overnight; you must work towards that vision with smaller, attainable goals. Perhaps you set a goal for each product you sell, so that those involved in selling that product have a clear goal for the coming year. You sell four products, so you set goals to double the sales of each over the next year.

Conduct Informal Research to Choose Goals

With your long-term vision as your guide, conduct informal research by talking to customers and employees to help set the course of direction for the next year or more. Including employees in the goal-setting process is critical, according to Clear-Point Strategy. Consulting different groups that are involved with your business gives you multiple perspectives and, in the case of employees, generates greater employee engagement in achieving them. Strong goals can compel your company to reach for higher standards.

Know the Secret to Making Progress

The secret to making progress towards your goals is to be sure they are achieveable but that people have to work to achieve them. If people are tasked with too audacious of a goal they can become sloppy, cut corners or make costly mistakes in an attempt to beat the clock. Conversely, a goal that’s too easily within reach may not generate enough fire in the belly to motivate people. One too far out of reach may burn everyone out in a mad dash to the deadline and perhaps fail in being achieved. Targets placed as milestones along the way to your goal can help with organization and increase motivation as people continue towards the goal.

Drawing Targets for Interim Success

Targets are benchmarks that set up a clear course of action, says the UN article. Reaching targets is part of the activity and effort that moves business forward. Some examples include setting and reaching weekly or monthly sales quotas, quarterly budget targets or unit production numbers. Financial targets, for example, can be written into a budget and shared to help keep everyone involved in achieving your company’s goals on the same page. For example, in your hypothetical situation of outlining a goal for each of your four products, to double their sales in a year, you could set quarterly targets for people to shoot for, that are easily measurable as each quarter comes to a close.

Correcting Goals and Targets as Needed

Some targets may need to be reached routinely to maintain progress toward your goals. For example, each salesperson on your team may be tasked with generating a minimum target number of sales per day, week or month in order to keep the team, department and organization moving forward. When individual or company targets are missed, adjustments to your target numbers may be critical to remain on course toward the larger goals. Consider, too, that the goal may be too ambitious. Is doubling the sales of all four products in one year reasonable? Newer products that have a large market may be able to be doubled, but as the market becomes saturated it will be harder to increase its sales. It's important to analyze progress towards goals and targets, correcting your course as needed.

• United Nations: Step 2: Visioning
• Clear-Point Strategy: 18 Tips for Setting Better Business Goals

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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Target Market Examples

Elon Glucklich

7 min. read

Updated April 24, 2024

Imagine your dream is to own a diner.

You have restaurant experience and a great location in mind – you just need the bank to approve your loan to get started.

But the bank has questions. A big one it wants answered is: who is your target market?

It might be tempting just to say, “hungry diners.” But you’ll need to dig deeper to truly define your target market . 

In this article, we’ll use this diner scenario to walk through the market research process and illustrate what the final result could look like.

• Questions about your target market

Before you even set foot in the bank, you should already have asked – and taken steps to answer – several key questions about your target market.

Let’s call our example business the Bplans Diner. Where is that perfect location you’ve found for the diner? Is it in a densely populated urban area, suburban neighborhood, or rural?

What are your hours of operation? Some diners cater to a breakfast crowd, while others might offer 24-hour dining to be a favorite among night owls. When you expect your peak hours could help determine whether you should expect to sell more omelets or hamburgers.

What’s the area’s median income, and what types of businesses or institutions are nearby? This information will help you determine pricing and marketing strategies for your diner. For instance, if your diner is located in a business district, you may want to offer lunch specials. But if it’s near a college or university, you might want to offer student discounts.

This is what a thorough target market analysis looks like, providing key insights and data to pinpoint the specific groups of customers most likely to patronize your diner. Gathering all of this information may sound intimidating, but it’s really just a matter of doing research. If you need help and guidance, check out our complete guide to conducting market research for your business . 

Let’s look at an example of a target market analysis for this diner. Then, we’ll break it down and discuss each element in detail.

• Example of a target market analysis

As you can see, the target market analysis follows the basic market segmentation process of splitting out potential customers into their demographic, geographic, psychographic and behavioral traits.

Next, let’s take a look at each in more detail. Afterward, we’ll look at how you can harness your target market analysis into actual business strategies.

• Demographic

You may have noticed that the demographic analysis in our example is very broad – 18 to 65 years old, including students, workers, and some seniors.

Finding your target market isn’t always about identifying a narrow demographic to cater to. In the case of a restaurant, it makes sense to focus on the geographic location and who currently frequents the area (more on that in the next section).

A different approach may be needed for a technology product that’s sold online. In that case, narrowing the demographic focus to specific age ranges or needs would be much more important than where the business is located.

In the case of the diner, we reached our decision by conducting a demographic analysis, examining the age ranges, occupations, and other concrete data points about potential customers near the proposed location (Reminder: we didn’t do this for the Bplans Diner, we’re just providing an example). 

There are several ways to go about collecting this information for your business. The most straightforward is to get out in the neighborhood, take a look around and talk to people. Are you mostly seeing students, or families? Are there a lot of office workers in the area? 

You can also look up data from the U.S. Census Bureau , which includes population, age, income and other useful information, often down to the neighborhood level.

After conducting this research, one valuable step is to create a detailed customer persona that represents the typical customer you expect for your business (we provide an example of a customer persona for the diner further down in this article).

While the demographic analysis considers the type of people who might frequent your business, the geographic analysis considers the characteristics of the neighborhood itself. 

Our target market analysis for Bplans Diner noted that we plan to operate in an urban area near a university with heavy foot traffic and expect a fair amount of late-night diners.

A key reason for examining the geographic makeup of your businesses is to size up your competition. If there’s already a popular diner in the area you plan to target, getting customers could be a major challenge. But if there’s a lack of dining options or no one is serving diner-style food, you’re more likely to be successful. Determining the size of your market will help you create reasonable revenue projections. 

We also mentioned the plan for Bplans Diner to cater to a late-night crowd. Examining the geographic makeup of the neighborhood will help you determine if there are the kinds of businesses – bars, music venues, or businesses such as hospitals where people are working all hours – to justify targeting this group.

• Psychographic

You know the demographics and geographic characteristics of your market. Now it’s time to consider the attitudes and values of your potential customers.

The psychographic analysis helps to understand the lifestyle of potential customers and how that might affect their preferences as consumers. If many of your potential customers are health-conscious, for instance, you’ll want to ensure your diner provides options like salads or gluten-free menu items. But if most customers are families looking for a place to bring their children, it may be important to keep classic items like hamburgers and french fries on the menu.

The best way to understand your potential customers’ attitudes is to get out and talk to them. Customer interviews are among the most powerful methods of validating a business idea , since you’ll get honest, real-time feedback from the kinds of people your business would depend on.

Finally, the behavioral analysis expands on customer psychographics by examining what customers do, given their values. This is another place where it’s worth considering the broad demographics of the diner’s target market – 18 to 65 years old, split among students, workers, and seniors.

They may all want the diner’s food, but their behaviors will vary widely. College students might be looking for a late-night study spot, or a place to meet up with friends for dinner before a concert or sporting event. But workers and seniors might be more interested in breakfast or lunch specials. 

Each of these behaviors gives a business owner valuable information to target individual segments of their target audience. For instance, you might want to play popular music in the evenings to get young diners ready for a night out on the town. But you’ll want a quieter ambiance at the time of day when seniors are most likely to come in. The environment can be adjusted based on when certain customers frequent the business.

Addressing behavioral aspects like buying motivations and concerns of your potential customers will also help you effectively market your diner. For example, you could create marketing campaigns based on student discounts, late-night specials, or a family-friendly atmosphere, depending on your customers’ behaviors.

• Connecting a target market analysis to business strategy

So far, we’ve touched on each of the components of a target market analysis for a diner: customer demographics, geographics, psychographics, and behaviors. (It’s also important to conduct an industry analysis to understand competitive and macroeconomic forces affecting your planning.)

With the target market analysis complete, you’re better equipped to demonstrate a thorough understanding of your customers to a lender.

Here are a few insights a business owner could use for the Bplans Diner, developed through the above analysis.

• Bplans Diner Competitive Analysis

Market Trends: Growing demand for late-night food options, increasing preference for healthy dining options.

Competitor Strengths and Weaknesses:

Competitor A: Strong brand but limited menu options.

Competitor B: Wide variety of options but lacking in ambiance.

• Bplans Diner Marketing Strategy

Product Differentiation: Offering a diverse menu that caters to various preferences, including healthy options.

Positioning: Establishing Bplans Diner as a reliable, quality, 24-hour dining option in the region.

Promotion: Utilizing social media to announce special night-time deals and promotions.

• Get started with your business plan template

A target market analysis is a key part of any business plan. But it’s just one piece. At Bplans, we take some of the pain out of business planning. We’ve developed a free business planning template to help reduce entrepreneurs’ time to create a full, lender-ready business plan. Bplans has also collected over 550 free sample business plans across numerous industries. Find a plan in your industry to get inspiration for your plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

Table of Contents

Related Articles

3 Min. Read

How to Use TAM, SAM, SOM to Determine Market Size

9 Min. Read

How to Write a Customer Analysis

8 Min. Read

How to Conduct an Industry Analysis

10 Min. Read

How to Create a Detailed User or Buyer Persona

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Performance Targets

A Performance Target is the specific, planned level of a result to be achieved within an explicit timeframe with a given level of resources. Missions should set targets for the end of the DO time period for their performance indicators and may set targets for the interim years in between. Yearly targets are required for standard indicators that are reported to Washington in the annual performance reports.

USAID guidance on setting performance targets indicates that they should be ambitious, but achievable given USAID (and other donor) inputs. Missions should be willing to be held accountable for achieving their targets. On the other hand, targets that are set too low are also not useful for management and reporting purposes. For many indicators it is useful to establish annual targets as well as an overall target for the CDCS period, and for some indicators it may be appropriate to establish separate targets for men and women, or to disaggregated them in other ways.

While the value of targets in a performance management system is well established, the mechanics of “how to” set targets are less fully prescribed. USAID's  TIPS on Baselines and Targets  identifies historical trends and benchmarks, i.e., how well others are performing on an indicator, as useful starting points for setting targets.

Sri Lanka LPI Index Scores 2012 Relative to Best Performers and Simiar Countries

In addition to determining overall CDCS targets, most Missions identify annual targets for many of their performance indicators. When setting annual targets, it is important to consider what path improvements will take. For some, most of the improvement that occurs, e.g., after a policy change, may emerge quickly, where as behavior changes which depend on new knowledge and possibility a change in peoples attitudes may emerge slowly. A linear path from a baseline to achievement of the target for a CDCS performance indicator is not as likely in practice as it is simple to draw.

Regardless of what approach a Mission uses to set targets for the specific indictors it will monitor, it can be useful to those involved in implementing or evaluating a program to understand how targets were set. USAID's Feed the Future program note on target setting, the “featured” reading on this page, is exceptional for its detailed and transparent explanation of who targets for this initiative were established.

For incorporating separate targets for men and women on performance indicators into a PMP, the table below from USAID/Afghanistan's Alternative Livelihoods program is a useful example of good practice.

Money blog: Iconic British brand makes big losses; Vinted forced to apologise to sellers

Taylor Swift is coming to the UK - and bringing her massive economic influence with her. Read this and all the latest consumer and personal finance news in the Money blog - and leave a comment or your money problem in the box below.

Wednesday 15 May 2024 09:40, UK

• Taylor Swift to bring nearly £1bn boost to economy
• Michelin-star chef reveals his top Cheap Eats in London - including an unbeatable sub sandwich
• Vinted forced to apologise for cash withdrawal delays
• AI-powered mortgage lender cuts rates twice in a week

Essential reads

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• Basically...  What is PIP - and what could government changes mean?
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Ask a question or make a comment

By James Sillars , business news reporter 

A solid start to the day for the FTSE 100 despite one of its well known constituents posting a big drop in profits.

The index rose by 0.5% in early dealing to stand at 8,469.

Leading the gainers were industrial and mining stocks. 

Among the big names reporting its progress this morning was Burberry.

Its annual results to the end of March showed a 34% fall in operating profits as demand for luxury slowed in the second half.

The company's chief executive, who is in the process of taking the firm more upmarket, said he expected the current year to remain challenging but with a pick-up in sales weighted to the final six months.

Burberry, nevertheless, awarded a 61p per share dividend which was flat on the previous financial year.

Its shares were down by more than 3%.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "Burberry's latest figures leave a lot to be desired, amid slowing demand for luxury... Not only does this highlight the extent of consumer caution across the globe, it also puts a spotlight on some Burberry-specific issues. 

"Refreshing the store estate is all well and good, but only if those costs and charges can be recouped by selling the clothes they hold. While Burberry's brand repositioning has come a long way, it’s not yet sharp enough to slice through to the core of the even more resilient end of the luxury market."

She added: "Slowing trends are being seen across the board in the sector, so these weaker results aren't a total bolt from the blue. The question now will be how quickly demand picks up, and that of course is in the hands of the economy... Burberry faces challenges, but it remains a strong heritage brand, with a lot of the right strategic ideas."

Taylor Swift's Eras Tour has been predicted to provide a £997m boost to the UK economy. 

Fans are expected to fork out an average of £848 to see the star on one of her 15 tour dates. 

That's according to data from Barclays, which has added up the total spending of the Swifties lucky enough to get a ticket.

After tickets, fans will spend the most on accommodation at around £121, with other notable costs including £111 on travel and £56 on an outfit. 

Those visiting London, Liverpool, Edinburgh and Cardiff for the concert are expected to spend £79 each on official merchandise, as well as £59 on a pre-show meal. 

The average amount spent on an Eras Tour ticket is £206, yet for 14% of fans, including those who purchased VIP ticket packages with premium seating and exclusive merchandise, the total exceeds £400.

Dr Peter Brooks, chief behavioural scientist at Barclays, said fans of "cultural icons" like Swift have a "powerful" spending power. 

"Whoever came up with the phrase 'money can't buy happiness' clearly wasn't a Swiftie," he said. 

"When it comes to cultural icons like Taylor Swift - like we saw with Elvis and Beatlemania in the 50s and 60s - supporters have such a strong connection to the artist and to the rest of the fandom that the desire to spend becomes even more powerful.

"For non-fans, £848 may seem like an enormous amount to splash out on a concert - but for Eras Tour ticketholders, every pound they spend is an investment in the memories they'll create."

Every Wednesday we get Michelin chefs to pick their favourite Cheap Eats where they live and when they cook at home. This week we speak to Andy Beynon, chef patron of Behind in London - which was awarded a Michelin star after being open for just 20 days. 

Hi  Andy, c an you tell us your favourite places in London where you can get a meal for two for less than £40?

I love Lahore Kebab House in Whitechapel. It's family run and I've been going there for about 15 years. I used to go with my dad - we'd get a couple of lagers from the shop next door, then tuck into lamb chops, tarka daal, the Peshwari naan, which is always cooked fresh on the tandoor, and all the dips on the menu. 

You can't beat a "That Spicy D" from Dom's Subs . There's just something about that burnt chilli mayo and schiacciata piccante. It's my favourite lunch to have on the go, and totally worth the mess. 

Umut 2000 in Dalston is my go-to for a kebab fix. They also do this amazing chargrilled lamb mince on a bed of tomato sauce with yoghurt and clarified butter. So good.

What's your go-to cheap meal at home?

I don't cook at home often, but when I do it's usually a big pot of spicy daal. It's super easy to make and keeps well in the fridge or the freezer. My secret ingredient for making the perfect daal is condensed milk - simply add a spoonful at the end to balance all of the spice.

We've spoken to lots of top chefs and bloggers - check out their cheap eats from around the country here...

Vinted has apologised for a tech issue that has left its sellers facing long delays to withdraw their cash. 

Users have been complaining over the past few weeks about their balance not updating quickly enough after being told they had been paid... 

We reached out to platform about the issue - it said its payment service provider Mangopay was aware of the problem and was "in the process of resolving" affected cases. 

It said a "very small number" of Vinted members have experienced an issue with funds being received by banks after payouts had been initiated. 

"The large majority of payouts are successfully completed every day," it added. 

"Vinted is in constant contact with Mangopay to resolve any cases brought to our attention, however, there may be a further delay as a result, for which we apologise.

"Many cases have already been resolved and we are working as quickly as we can to help resolve the remaining cases." 

Mangopay processes and stores transactions made through Vinted and then pays the cash into users' bank accounts. 

It told us part of its legal obligations require it to verify users' identities for the payment process to be successful.

"Our team works to carry out this verification process as quickly as possible so that users can continue using their accounts as normal," it said. 

"Marketplaces and platforms often have complex payment needs and as a regulated financial institution, we take our compliance, due diligence processes and regulatory obligations very seriously." 

However, it added that from "time to time" the process can be delayed, which means it needs to withhold funds for a certain amount of time, or it "may experience issues with the payout process".

"We apologise for any delays in receiving payments caused as a result of this and are working with Vinted to resolve each case as quickly as possible," it added. 

The Duke and Duchess of Sussex's Archewell Foundation has been labelled "delinquent" in the US for failing to submit annual records.

A letter was sent to the charity on 3 May by by California's Registry of Charities and Fundraisers, saying it has been "listed as delinquent" for "failing to submit required annual report(s) and/or renewal fees".

The letter said an organisation listed as delinquent is banned from "soliciting or disbursing charitable funds" and its registration may be "suspended or revoked".

It is understood that a physical cheque was sent by Archewell Foundation but not received, and a new one has been sent to resolve the issue.

It is believed the charity was only made aware of this when the delinquency notice was published.

Read more on this story below...

Shares of US video game retailer GameStop have soared again today, fuelled by the return of online influencer "Roaring Kitty" to social media.

Real name Keith Gill, the influencer's first online post caused shares to jump yesterday, with another surge reported today.

The retailer's shares rallied 132% in pre-market trading before falling back to about 80% up as US markets opened. 

Mr Gill shared a meme and more than 10 clips from movies including The Avengers and Tombstone. Though the posts didn't mention any company names, GameStop and US cinema chain AMC were the most-traded stocks by investors yesterday and today, according to data from JP Morgan.

He is credited with helping to fuel the "meme stock" craze during the COVID pandemic, which saw GameStop shares rise more than 1,000%. They later collapsed as interest faded.

Tesco's managing director has seen his pay deal more than double to almost £10m. 

That's 431 times the wage of the average £23,010 salary for a Tesco worker. 

Ken Murphy received a pay packet worth £9.93m for the year to February, the supermarket's annual report revealed.

His pay deal came to £4.4m in the previous financial year. 

The rise was driven by £4.91m from his performance share plan (PSP) after he helped lead the company to higher profits in the face of challenging inflation.

This PSP payment will be paid out in Tesco shares and is based on the company's performance since 2021.

It comes on top of an annual salary of £1.64m and an annual bonus of £3.38m. 

The group's chief finance officer, Imran Nawaz, also saw his annual pay package more than double.

He received a total £4.95m for the year, jumping from £2.27m in the previous financial year.

The retailer was criticised for revealing a £2.83bn profit for the year to February when many customers had been impacted by rampant food and drink inflation. 

Alison Platt, chairwoman of the Tesco remuneration committee, said the pay boost reflects the fact "Tesco has delivered for all of its stakeholders over the last year".

She added: "Tesco remains committed to a competitive and fair reward package for all colleagues and over the last two years we have invested more than £800m in colleague pay, as well as significantly enhancing the range of wellbeing benefits we offer."

Sony's operating profit  has climbed 5% this business year - even as it forecasts lower PlayStation 5 sales. 

The Japanese entertainment and electronics company said its operating profit is expected to come in at 1.28 trillion yen (£6.5bn) in the year ending March.

Sony, a major supplier of image sensors for smartphones, said its chips business is expected to book a 40% rise in operating profit on higher sales and lower costs.

At its gaming unit, revenues are expected to fall with the PlayStation 5 in its fourth year, but Sony said user engagement and cost control could drive future profitability at the business.

It predicted PlayStation 5 sales will fall to 18 million units from last year's 20.8 million. 

Cheaper energy deals for new customers could potentially return in October, with the industry regulator announcing a review of their ban. 

Ofgem is consulting on removing the block on acquisition-only tariffs in an attempt to encourage competition between suppliers. 

The ban was introduced as a short-term measure in April 2022 to protect consumers during the energy crisis, and was due to be lifted in March next year.

Now, the regulator has said that it is the right time to consider removing it as the energy market continues to stabilise.

MoneySavingExpert Martin Lewis welcomed the consultation, saying: "We need anything possible right now to stimulate competition and bring prices down." 

"In normal times, I wouldn't call for firms to be allowed to offer new customers cheaper prices than existing, yet these aren't normal times." 

Melinda French Gates has left the charity she set up with her former husband, Microsoft billionaire Bill Gates, after the couple's divorce. 

In a statement, she said she would step down from her position at the Bill & Melinda Gates Foundation on 7 June. 

You can see her full statement below... 

The foundation was created in 2000 and it is one of the most influential charitable organisations in the world. 

It has spent billions working to tackle poverty and disease around the world. 

Bill and Melinda Gates announced they were divorcing three years ago after being married for 27 years. 

An AI-powered mortgage lender has cut rates for a second time this week. 

MPowered has reduced all its two and five year fixed deals, with rates starting at 4.37% down from 4.59%. 

"The swap markets are moving at pace at present, and it is important that as a responsible lender we are able to react and pass on any savings we can to borrowers," said Matt Surridge, sales director of MPowered Mortgages. 

"I'm therefore really pleased we are one of the first, if not the first, to cut rates this week, having already cut rates once in the past week." 

The company uses AI in its mortgage process and is a fully digital platform. 

McDonald's has decided to remove the iconic smile from its Happy Meal box in a bid to teach children about their emotions. 

Instead, a sheet of stickers depicting different moods will be placed inside, which children can use to express their feelings. 

A QR code for a mental health hub will also be placed on the red packaging to provide its younger customers with different resources about emotional wellbeing. 

The move comes as part of Mental Health Week, with research by the fast food chain finding nearly half of children feel pressure to be happy all the time. 

Football legend Rio Ferdinand has teamed up with the company to support the campaign, which runs until 19 May. 

The father-of-five said: "It's our job to empower our children to express themselves freely and support them every step of the way in understanding that it's okay to not be happy all the time." 

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