A business driver is a resource, process or condition that is vital for the continued success and growth of a business. A company must identify its business drivers and attempt to maximize any that are under their control. There are always outside business drivers that a company cannot influence, such as economic conditions or trade relations with other nations.
Identifying and monitoring the key drivers of your business is critical to boosting profitability. A key business driver is something that has a major impact on the performance of your specific business. A whole range of internal and external factors affects the performance of every small business. The secret is to focus on a handful of key drivers that:
- reflect the performance and progress of your business
- are measurable
- can be compared to a standard, such as a budget or last year's figures, or an industry average
- can be acted upon
The range of business drivers varies enormously from business to business. For example:
- sales leads in a capital goods or service business
- sales per square meter in a retail business
- machine downtime in a factory
- 'first time fix' in a maintenance business
Even direct competitors may use different drivers to improve their business performance. For example, prime location is not a key driver for an internet-based business selling computer parts, but it is for a 'bricks and mortar' competitor that relies on well-located retail stores to attract foot traffic.