Can I use the Balance scorecard for small business performance measures? What are the other recommended performance indicators for small businesses?
In a small business, it is important to use the principle of sufficiency and not complicate things where you can get by with simple ones, since the degree of division of labor is low and there is no time and no one to deal with complex calculations. I recommend that you create and maintain an up-to-date financial business model and, on its basis, determine the net profit, net present value, and payback period by periods. It is also necessary to determine the production capacity. In 99% of cases, this is enough to manage a small business.
BSC is not intended for small companies, although you could use it.
I would say that it is enough to use the standard indicators (eficiencia, sales,debt).
You can definitely use the Balanced Scorecard for measuring small business performance. It's a handy tool that helps track progress across different areas. Other recommended performance indicators for small businesses include Key Performance Indicators (KPIs), Cash Flow Analysis, Customer Retention Rate, Employee Productivity, Net Promoter Score (NPS), and Return on Investment (ROI). These indicators provide valuable insights into financial health, customer satisfaction, employee efficiency, and overall business success. Choose the ones that align with your goals and industry for a clear picture of your small business's performance.
BSC needs time, people and skills which is scare in budding organisations or small businesses. I will recommend MBO - Management by Objectives to measure performance and outcomes as it is simple and easy to understand. Goals and outcomes are standardised and actual performance is measured againt the set standard. Strategic goals can be converted into individual goals for each employee. Managing a balance sheet according would suffice.
Elizabeth A. Owino, intuitive and due to when I used BSC I guess it has improved, still I must say that BSC is not the first tool that pops up in my brain when it comes to measuring small businesses. I also agree with Vitaly Ivanov says about complex calculations. How about this below instead of BSC ?
These indicators may provide valuable insights into various aspects of the business and help measure its overall performance. Here are some recommended performance indicators for small businesses:
Podrían funcionar los OKR. objetivos y resultados clave con medición medición avance.
I believe the Kaplan and Norton framework can be applied for most organizations as it provides a way to articulate the business strategy/direction and establish indicators to monitor and refine aaccording to progress/results. For more, see my review of their "Strategy Maps" https://www.amazon.com/review/R17YZPW5HWITDQ/ref=cm_cr_srp_d_rdp_perm?ie=UTF8
For instance, I was involved with such an application for a Charter School in the US, see my related review https://www.amazon.com/review/R2KDL297QU08II/ref=cm_cr_srp_d_rdp_perm?ie=UTF8
It seems the key is determine what is key to business success and then finding measures that relate and can be useful. Some fairly recent books have addressed such questions such as Karabell's "Leading Indicators" --- https://www.amazon.com/review/R3766ZRDX412HE/ref=cm_cr_srp_d_rdp_perm?ie=UTF8
or even Davidowitz's "Everybody Lies" https://www.amazon.com/review/R1WI55KSSA581U/ref=cm_cr_srp_d_rdp_perm?ie=UTF8
which treat related matters and seem to advocate using data that we have available more readily digitally these days to reveal what is actually happening relative to intentions or expected results.
Some thoughts and references to consider.
I believe BSC is as useful in small businesses as it is in large organizations. Balanced scorecard approach gives you more accurate insights into the state of your business through the following perspectives:- financial, customer, internal process, and learning and growth. No one in their right mind would not want to view his business whether big or small along these perspectives.
Yes, you can. BSC is a popular tool for the performance evaluation of organizations, let alone small business.
Other recommended performance measurement tools for small business to consider KPIs and Benchmarking.
The balance scorecard is a performance tool used to measure an organisation's performance on a variety levels. It was developed by Kaplan and Norton in 1992, and it is designed to help organisations to keep track of their performance in for key areas: financial, customer, internal processes, and learning and growth.
Yes, you can use the Balance scorecard for small business include customer feedback, employee satisfaction, customer retention, cost reduction, and profitability. Other indicators may be specific to business and its industry.
Saber establecer y comunicar la estrategia corporativa para alinear los recursos y las personas en una dirección determinada no es tarea sencilla, y un Cuadro de Mando resulta de gran ayuda para lograrlo. A través de sus indicadores de control, financieros y no financieros, se obtiene información periódica para un mejor seguimiento en el cumplimiento de los objetivos establecidos previamente, y una visión clara del desarrollo de la estrategia. Así, y gracias a esta inteligencia empresarial, la toma de decisiones resulta más sencilla y certera, y se pueden corregir las desviaciones a tiempo.
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