The wine industry is an exciting, creative and passionate industry, but also one full of challenges. Environmental, economic and political challenges often arise and changes in consumer trends mean regular review of business activities and offerings is a must.
For business owners and boards, timely and regular reporting against key performance indicators (KPIs) is critical to track the performance of the business. KPI reporting arms decision makers with sufficient relevant information to make better decisions more quickly. Such information is particularly important within the wine industry where the challenges are many and the cashflow is often tight.
For a KPI to be useful it must be SMART – specific, measurable, achievable, relevant and timely. The KPI’s can be both quantitative and qualitative. A well-developed reporting framework should include both and align to the goals and business/strategic plan of the business.
KPI’s that a wine business could use include:
- Inventory turnover
- Debtor days
- Quick ratio
- Current ratio
- Debt to asset ratio
- Cellar door visitors
- Visitor conversion rate
- Average wine club tenure
- Email click-through rate
- Average wine club sales per month
KPI’s can assist answer many questions and highlight areas of business that may need attention so that appropriate action can be taken. If the measure is not there, the question can not be appropriately answered and remedied.
Please reach out to one of our experienced Nexia advisors if you have any questions in respect of KPI reporting or any of our other industry offerings.