When it comes to business metrics, there is no fixed standard. If you are an owner of an online business, you need to know how many people visit your site on a daily basis, and how often your application your app is downloaded. In this article, you will learn the business performance metrics every business owner should know.

1. Cash flow

The cash flow of your business shows how much money goes in and out of your business. Once cash is spent, that is considered as a negative cash flow. When your business receives cash, that is regarded as a positive cash flow. As much as cash flow helps to show the health of a business, you should never confuse it with profits. Cash flow shows how much money you spend sorting out your expenses, wages, purchases, and debts. For your business to run smoothly and avoid being unable to pay costs in the future, it is vital to run a cash flow analysis on a weekly or monthly basis. You can opt to use a business intelligence dashboard which will give you all the information you need. As a result, you will be able to tell what needs improvement. If you can accurately manage your business finances, then you can succeed in your industry.

2. Sales revenue

You need to know if your sales team is bringing in enough money to cover expenses and your company’s long-term goals. The only way you can get that information is by knowing your sales revenue, which is the income from products and services bought minus the cost of products that were not delivered or returned by clients. Using such data can help you gauge the situation of your business. Sales revenue has to be analyzed on a monthly or annual basis. You can use your monthly sales revenue to keep track of slow and fast months. From there, you can be able to come up with a plan that will help your business survive in all seasons. You can be able to plan enough cash flow that will sustain your business during the low season. A revenue dashboard can give you monthly reports of things like top clients, working capital and top performers in your team.

3. Customer loyalty and retention

If your business can attract the right clients, the question you should ask yourself is, do those customers come back for more products? The moment a client comes back for more products and services from your business, it shows loyalty and good customer service. To be able to tell if your clients are loyal, they will refer your business to other people and spend a lot of money on your products and services. You could measure customer loyalty by taking surveys or asking for face to face feedback. An increase in customer loyalty and retention leads to increased profits. As a business owner, you need to know that if you treat your clients well, they will spend more money and make your business successful.

4. Client lifetime value and client acquisition cost

Knowing the worth of each client to your business is vital. Additionally, you need to know how much it would cost your company to acquire new customers. Getting to correctly understand client lifetime value (CLV) and client acquisition cost (CAC) is necessary for understanding the performance of your business. CLV is the amount of money clients spend for as long as they are dealing with your company. Every business owner needs to know the CLV so that they can know how much money they would spend to get new clients, or retaining the old ones. On the other hand, CAC is the total amount of money spent on marketing and branding divide by the number of clients acquired during that period. Keeping a close comparison of CLV and CAC helps you know when you need to get new clients.

Any business owner with a vision of success would want to achieve the points above. As much keeping track of these metrics sounds time consuming and involving, they have advantages that are worth it to your business. Be in charge of your business.


by: Sia Hasan