606 - KPIs: How to Measure Your Business Performance
The How of Business - How to start, run, grow and exit a small business.
Henry Lopez, Levante Business Group
4.7 • 522 Ratings
🗓️ 4 May 2026
⏱️ 17 minutes
🧾️ Download transcript
Summary
KPIs (Key Performance Indicators) provide an effective way to measure your business performance using both leading and lagging indicators to make better decisions and drive growth.
Show Notes Page: https://www.thehowofbusiness.com/606-kpis-measure-business-performance/
Small business owners often rely on gut feel or a quick glance at their bank balance to gauge how their business is performing, but that approach leads to reactive decision-making and missed opportunities. In this episode, Henry Lopez explains how to use Key Performance Indicators (KPIs) to measure business performance more accurately and proactively.
He breaks down the difference between lagging indicators - such as revenue, profit, and cash - and leading indicators like leads, conversions, and customer activity, which help predict future performance. By understanding and tracking both, small business owners can gain clarity and control instead of simply reacting to past results.
Henry also shares a simple framework for selecting KPIs, emphasizing that most small businesses should focus on just three to five core metrics that are measurable, aligned with business goals, and reviewed consistently. To make it practical, he walks through a sample KPI scorecard that includes revenue, profit, cash, customer flow, and customer retention, while reinforcing that these are starting points, not a one-size-fits-all solution.
"You can't improve what you don't measure, but only if you're measuring the right things," Lopez explains, highlighting the importance of choosing the right metrics for your business.
This episode is hosted by Henry Lopez. The How of Business podcast focuses on helping you start, run, grow and exit your small business. The How of Business is a top-rated podcast for small business owners and entrepreneurs. Find the best podcast, small business coaching, resources and trusted service partners for small business owners and entrepreneurs at our website https://TheHowOfBusiness.com
Transcript
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| 0:00.0 | Welcome to the How of Business with your host, Henry Lopez, the podcast that helps you start, |
| 0:05.9 | run, and grow your small business. And now, here is your host. |
| 0:12.9 | Welcome to the How a Business podcast. This is Henry Lopez. And on this episode, I'll cover the |
| 0:18.0 | fundamentals of KPIs, key performance indicators, to help measure performance |
| 0:22.7 | so you can make better decisions and grow your business. Because knowing how your business is |
| 0:27.8 | performing should not just be about gut feel or checking your bank account balance at the end of the |
| 0:33.2 | month. You should instead use a few critical measurements that tell you the truth about how your |
| 0:38.7 | business is doing. You can find all of the Howa Business resources, including the show notes page |
| 0:43.5 | for this episode, and learn more about my one-on-one and group coaching programs at the howa-business.com. |
| 0:49.1 | I also invite you to join the Howa Business community on Patreon, and please subscribe wherever you |
| 0:53.8 | might be listening so you don't miss any new episodes. If I ask you how your business is performing right now, |
| 0:59.7 | what numbers would you point to? And are those numbers telling you what has already happened, |
| 1:03.7 | or what's about to happen, or perhaps both? In the context of what we're talking about here in this |
| 1:08.3 | episode, your numbers are not just your financial statements, although your financial statements may well contain one of your |
| 1:14.3 | KPIs, one of your financial KPIs. We're talking about your broader KPIs, those high-level |
| 1:19.9 | key performance indicators, and it should be a small set of numbers that tell you how your |
| 1:24.8 | business is really performing. There are lagging indicators or KPIs. Those are the |
| 1:29.6 | ones that tell you what has already happened. And they usually make up the bulk of the numbers that |
| 1:33.7 | we measure, things like revenue, profit, cash, those things that happened in the past. And going back |
| 1:39.4 | to the financial statements, that's often where those numbers come from if we're talking about |
| 1:43.0 | financial KPIs. Leading indicators, which can be much more powerful, but trickier, maybe harder to measure |
| 1:49.7 | with accuracy, or what's coming. Now, we can measure things like leads, and even though we've measured |
... |
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