Key performance indicators (KPIs)
The KPIs that matter for small UK businesses and landlords, and how to compute and track them.
Articles
KPIs: fewer, watched properly
A key performance indicator is a number that changes decisions. Five watched monthly beat thirty in a dashboard nobody reads. The test for keeping one: if it moved sharply, would you do something? If not, it is reporting, not a KPI.
The right set depends on the business model — but almost every small business core set includes gross margin, debtor days, and cash runway, because those three catch the classic failure modes early.
A core set for a trading business
Gross margin percentage (is the core trade holding?). Revenue against the same month last year (is the direction real, seasonality included?). Debtor days (is cash getting stuck in customers?). Cash runway at current burn (how long could a shock last?). Plus one operational driver you control directly — quotes issued, jobs completed, utilisation, orders shipped.
That last one matters most for management: financial KPIs report outcomes, operational ones predict them.
A core set for a landlord
Occupancy and void days per property. Rent collection rate (charged versus banked, monthly). Net yield per property — rent minus all running costs, against value. Interest cover: rent against mortgage interest, per property and portfolio-wide, the number that decides how a rate rise lands. And arrears, flagged the month they start, not the quarter they compound.
Per-property is the discipline: portfolio averages hide the one property quietly losing money — which is usually the decision the numbers exist to force.
Making them routine
KPIs work when they arrive on a schedule, computed the same way every time, next to their history — which makes them a by-product of reconciled monthly bookkeeping, not a separate project. Define each one once (formula, source, owner), then let the month-end process produce them.
That is how the Portfolio Reporting Pack treats them: the monthly numbers by the 7th carry the KPI set agreed for your business, tracked consistently, so the conversation is about the movement, not the arithmetic.
Frequently asked questions
How many KPIs should a small business track?
Five to eight, monthly, with history. Enough to cover margin, cash, customers, and one operational driver — few enough that every one gets looked at. A metric nobody would act on is clutter, however sophisticated.
What's the single most important KPI?
If forced to one: gross margin for a trading business, interest cover for a leveraged landlord, cash runway for anything early-stage. Each is the number whose deterioration kills fastest in that model — but the honest answer is that one number is never enough.
What KPIs matter most for a landlord?
Void days, collection rate, net yield per property, and interest cover. Together they answer: is it let, is the rent arriving, is it worth owning, and can it survive a rate rise. All four are computable from ordinary rental records kept per property.
Do I need software or a dashboard for KPIs?
No — a spreadsheet fed from reconciled monthly numbers is enough, and consistency beats presentation. Software dashboards help once the underlying bookkeeping is current and correct; they cannot fix numbers that are neither.