Identifying and leveraging key factors can help you keep your business going through a period of growth. Choosing the right key factors can also help you increase your bottom line. In this article, we will discuss about what is a key factor, how to choose one, and provide examples of factors you can choose from when creating your business plan.
What is a key driver?
- Macro Factors: These are natural, fiscal, or geopolitical variables that affect a company on a regional or national level.
- Microfactors: These are variables that affect specific companies or industries on a local or individual scale.
How to choose key drivers
1. Use a checklist
Effective key factors meet four criteria. They are:
- Impact on performance
- Compare with standard
- May change with additional information
2. Look for profitable areas
- Fixed costs or overheads
- Different prices
3. Ask questions
4. Consider Benchmarks
5. Track all data
Here are examples of some of the key factors that can affect your business:
In companies that provide estimates or quotes, request levels may be an appropriate key factor. Requests meet the following key criteria:
Compare with standard