How do you know if your business is healthy?

Sure, you're monitoring your revenue, expenses and profit closely. Most likely you're worried about the numbers and would like to be a bit healthier – but the economy's still sputtering along, and customers are holding back.

There's a problem with focusing on revenue and profit: They're too comprehensive, and too late. It's like trying to figure where to go on vacation just by looking at your tax return.

This is where you need to develop a solid set of Key Performance Indicators, or KPIs. These are measures of progress in specific parts of your business which are strategic and influential.

Let's suppose that you'd like to drive more customers into your business. There will be four parts to this process:

• Plan: Before you start a new investment to attract customers, you'll create a plan. It'll include the actions, investments, milestones and analysis of potential problems.

• Activity: To implement the plan, you'll take some kind of action. You'll refocus employees, change your advertising budget, implement a new campaign and so on.

• Outcome: As a