If you track the wrong KPIs, you’ll make the wrong decisions faster.
Three categories matter most in service businesses:
- Cash: how fast money comes in versus goes out
- Capacity: your ability to produce without burning out
- Cycle time: how long work sits before becoming cash
Examples that actually matter:
- Days sales outstanding (DSO)
- Labor utilization
- Work in Progress (WIP) aging
- Gross margin by job
- Rework rate
What to do this week
- Pick one Key Performance Indicator (KPI) in each category and define how you’ll measure it weekly.
- Set a baseline for four weeks.
- Improve one KPI by 10 percent over the next 60 days.