Did you know that 28% of businesses fail due to problems with the financial structure of the company? This includes keeping poor accounting records.

In simple words, business metrics is the collection of relevant and meaningful business data that can help you make informed decisions to grow your business. Some people call it KPI (Key Performance Indicators) or analytics.

If you don’t understand your key financial metrics, you have no way of monitoring your business’s health—and you risk mingling assets, incurring penalties for filing taxes late, overlooking expenses, and running into difficulties paying bills and employees, just to mention a few!

It is, therefore, essential to not only understand what each of these key metrics can tell you about the health of your business but also to monitor how these metrics are performing on an ongoing basis. This will enable you to make better decisions, as well as plan proactively for the future.

Depending on the type of business you operate, the metrics you monitor will differ. For example, if you have an eCommerce website, you’ll want to measure unique visitors, referrals, bounce rate, and similar. If you’re running a subscription business, you’ll want to track churn rate, monthly recurring revenue, lifetime value, and so on.

However, there are a number of metrics that every business owner should know, including cash flow, accounts payable, accounts receivable, direct costs, operating margin, net profit, and cash burn rate.

Key metrics every business owner should monitor

Here is a list of four important metrics every business should keep track of in 2018 for successful business growth

Cash Flow (Revenue & Expenses):

Cash is the lifeblood of the business – and hence one of the most critical aspects of performance management. Tracking Cashflow let businesses assess whether their sales and margins are appropriate, and are consequently one of the most important KPIs for any business to track. A lot of businesses make huge revenues, but they actually come out in the red at the end of the year. Revenue is only part of the equation. You also have to consider your expenses and what will be left over in the business after-all is said and done..

Cost of Customer Acquisition:

As a small business, you need customers to meet your sales forecast. You need to find these customers and persuade them to buy your product or service.Customer acquisition cost is calculated by dividing total acquisition expenses by total new customers over a given period.
This is called customer acquisition and generally, it costs money. Advertising & Marketing costs are increasing day by day and investing in wrong marketing channel can badly affect profit margins of your business.

Customer Satisfaction & Loyalty:

It is important to measure customer satisfaction and loyalty level for every business. You build customer loyalty by treating people how they want to be treated especially your high valued customers.

Customer satisfaction and loyalty are all about attracting the right customer, getting them to buy from, ensuring they are satisfied with their purchase and will in nearest future buy in higher quantities and bring you even more customers.

Operational Performance & Productivity:

Measuring staff performance and productivity is an important metric to be tracked by most businesses. If you do not know how your staff is doing, then how can you truly know the inner workings of your own business?

Productivity ratios can be applied to almost any aspect of your business.  For example, sales productivity is simply actual revenue divided by the number of sales people.

The process works the same for manufacturing productivity,

marketing productivity, or support productivity. Compare your productivity to industry norms and check yourself for continuous improvement.



Tracking these important business metrics is important for a bunch of reasons, but probably the most important reason is the growth of your business. Instead of spending time in tracking a lot of KPIs you can get the better results by tracking these selected few.

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