Reports conducted globally have revealed that 1 out of 5 new businesses tend to fail in the very first year of its launch. To scale successfully your company, it is necessary to control as well as optimize each part involved in the operations. Monitoring and enhancing essential business metrics is the best way to achieve the desired goals. Also should be considered company’s financial statements.
Top 10 Small Business Metrics
There are present a few business metrics that can be leverage to evaluate business performance. It can also help drive more revenue as well as strengthen customer relationships. For startups and small businesses, important metrics are customer service, operational and sales metrics. Every key metric in turn has smaller metrics. It defines success based on your company’s nature and goals set.
1. Net Profit:
It is also referred to as net earnings and net income. The ‘bottom line’ is perhaps the most common term used. It includes taxes, operating expenses, interest, etc. It also has a simple basic formula. You may avail dedicated accounting software for quick and correct calculation.
2. Sales revenue:
It is considered to be the total money acquired through sales over a particular time period. No complex formula will be necessary. Simply tally up overall sales. To make progress, business leaders require tracking yearly, quarterly and monthly sales revenue in details.
3. Average monthly leads:
You need to get familiar with average lead number. Outlier month (bad\/good) can be spotted effortlessly by your sales team. Thus, you can make necessary marketing adjustments in real-time. Also experiment with new campaigns and marketing platforms if there is present lower than average lead numbers.
4. Sales growth rate:
This essential marketing and sales metric can help measure progress made in total monthly or yearly sales numbers. The Task Management involves deducting from total sales the last period’s sales, thereby dividing it with the last number.
5. Lead conversion rate:
Predicting customer numbers in your business is much easier. Identify lead conversion rate in the sales funnel. Divide total conversion number by lead numbers. Then multiply it with 100. Poor conversion rate will impact company’s financial statements Analyze lead quality to make necessary marketing strategy adjustments or enhance sales process.
6. Customer retention rate and churn rate:
Annual churn rate can be termed to be customer percentage leaving each year. To calculate churn rate, divide churned customers in a given time period by customer numbers derived at the period beginning. Churn rate signals customer experience and is vital for recurring services.
7. LTV (Customer lifetime value):
Customer’s lifetime value represents total money to be spent in the business or in products during lifetime. This figure when identified can help business leaders to make correct decisions on the amount to invest in marketing campaigns.
8. CSAT or NPS (Customer Satisfaction):
Direct ways exist to measure customer satisfaction instead of inferring depending on revenue. Customers can be requested to undertake surveys. NPS (Net Promoter Score) is termed to be a one-question survey, asking customers if they would recommend your service/products.
9. Shipping accuracy:
It is quite similar to finding on-time delivery rates. Formula used is Total Deliveries number – failed deliveries x 100 divided by total deliveries numbers. Only formula will not help to operate a successful business. Delayed package will not make customers happy. Effective Task Management should be devised to reduce manual steps.
10. On-time delivery rates:
On-time delivery is crucial to retain old customers and attract new ones. Delayed package will not fetch any referrals. Hence, on-time deliveries completed percentage should be analyzed. The difference will specify success or failure of the business.
The above Small Business Metrics are essential to track business performance and boost its operation.
