A business driver is a term used to describe the resources in a business that help maximise their performance. Identifying and monitoring the key drivers of your business is critical to boosting profitability, so it is important to discover exactly what reflects the performance of your business and discover which ones are measurable and capable of being acted on.
One of the simplest ways of understanding what business drivers are and how they can be identified and measured in your business is by looking at sales.
Most companies create sales reports so they can be measured and compared. A sales report is one indicator that can be easily measured but it may not be a driver. A sales driver may be the entire sales agenda, from sales calls, follow-ups, or web traffic. These are the different drivers that help you generate sales.
This is just one example of drivers but your business model will be different. To identify what your specific drivers are you must find out what the key factors are that help your business succeed. To do this you must ask questions about your company like:
- What drives sales figures?
- What drives costs?
- What drives my cash flow?
- What is the quality of my work force?
- What is my growth potential for new customers?
Determining what parts of your business truly drive up the value and measuring these is often difficult, as they can vary from indirect drivers, such as employee morale to more direct drivers like sales growth. Identifying what your business drivers are may need some consultancy work so don’t be afraid to ask the experts.