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Every Business Should Track 5 Important Metrics
The following are a few important metrics to track for small businesses.
Sales Revenue
Amount of money generated in sales minus returns is calculated as the sales revenue. Increase or decrease in sales need to be tracked on a monthly or annual basis so you can take action accordingly.
You can know how your business is growing since the previous year by reviewing your sales annually and help you to identify slow periods and busy seasons so you can prepare yourself for your cash flow situation. You can also identify which marketing and advertising strategies are successful by tracking your monthly sales revenue.
All Expenses
Keeping track of your small business sales revenue is great but you cannot know your monthly profit without knowing your expenses. You could be killing it in sales if your expenses or cost of staff are more than your sales revenue then you can’t stay in business for a long time.
Keep a track of all your monthly expenses which includes salaries, maintenance etc.
Profit Margin
Calculate your monthly profit once you know your total revenue and expenses. If your profit margins are low then either increase your sales or reduce your expenses.
If you don’t track your monthly profit it could blindly racking up expenses that might cause your business to lose money or just barely break even. Tracking this metric on a monthly, quarterly and annual basis can get an overall picture.
CPA (Cost Per Acquisition)
CPC is the average cost to obtain a new customer. Total amount of sales and marketing over a period of time and divide by the number of new customers in the time frame is calculated as the cost per acquisition. It is calculated on monthly, quarterly and annually.
Total sales and marketing should also include cost of staff, commissions, and all overhead sales and marketing costs.
NPS (Net Promoter Score)
NPS let you know how satisfied your customers are. It is calculated by subtracting the percentage of detractors from the percentage of your promoters.
To find the detractors from promoters ask your customers how they recommended your brand to others. It’s best to do this via anonymous surveys so that your customers’ answers are honest.
Business always needs improvement to grow. By these metrics you can have an idea to focus the areas of your business need your attention most. If the metrics are not reviewed on a regular basis you’re left to go on hunches, and hunches aren’t accurate.
Sales Revenue
Amount of money generated in sales minus returns is calculated as the sales revenue. Increase or decrease in sales need to be tracked on a monthly or annual basis so you can take action accordingly.
You can know how your business is growing since the previous year by reviewing your sales annually and help you to identify slow periods and busy seasons so you can prepare yourself for your cash flow situation. You can also identify which marketing and advertising strategies are successful by tracking your monthly sales revenue.
All Expenses
Keeping track of your small business sales revenue is great but you cannot know your monthly profit without knowing your expenses. You could be killing it in sales if your expenses or cost of staff are more than your sales revenue then you can’t stay in business for a long time.
Keep a track of all your monthly expenses which includes salaries, maintenance etc.
Profit Margin
Calculate your monthly profit once you know your total revenue and expenses. If your profit margins are low then either increase your sales or reduce your expenses.
If you don’t track your monthly profit it could blindly racking up expenses that might cause your business to lose money or just barely break even. Tracking this metric on a monthly, quarterly and annual basis can get an overall picture.
CPA (Cost Per Acquisition)
CPC is the average cost to obtain a new customer. Total amount of sales and marketing over a period of time and divide by the number of new customers in the time frame is calculated as the cost per acquisition. It is calculated on monthly, quarterly and annually.
Total sales and marketing should also include cost of staff, commissions, and all overhead sales and marketing costs.
NPS (Net Promoter Score)
NPS let you know how satisfied your customers are. It is calculated by subtracting the percentage of detractors from the percentage of your promoters.
To find the detractors from promoters ask your customers how they recommended your brand to others. It’s best to do this via anonymous surveys so that your customers’ answers are honest.
Business always needs improvement to grow. By these metrics you can have an idea to focus the areas of your business need your attention most. If the metrics are not reviewed on a regular basis you’re left to go on hunches, and hunches aren’t accurate.
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