When small business owners start a business they realize there are more responsibilities than they first thought. Small business owners usually obsess over analytics when it comes to the aspects of running a business. Analytics show how efficiently a business is being run or how efficient your employees have been.
There are small business metrics literally for every aspect of a business. It’s important to pick out the most relevant metrics for your business. If not, you can end up spending too much time and money on metrics with no relevance, which damages revenue. A small business owner typically has limited funds and cannot afford SAAS software right away to attain detailed reports. There are two key metrics that a small business owner should make sure to keep track of.
Customer Acquisition Cost/Life Time Value
Some small business owners have specific marketing budgets but don’t have systems in place to measure their exact effects. Whether it’s an app or a consumer product, it’s important to know the results and costs of each marketing channel.
In the early stages, try to avoid radio or television ads. They make it difficult to measure the customer acquisition cost. Digital campaigns such as social media marketing have systems in place to measure small business metrics.
Word of mouth marketing is also efficient and low cost. Dedicated customers help lower costs by spreading the word of your business voluntarily. In order to save money, a basic excel sheet could suffice to keep this metric. Small business owners should make sure to look up their particular industry standards for customer acquisition costs.
On ABC’s Sharktank an entrepreneur tells the investors how much revenue their company generates. Investors then usually ask “How much of that revenue was in the last month?”. Small business owners should decide whether or not to keep track of daily, weekly or monthly growth.
Small business owners need to evaluate trends going on in the business in order to identify necessary changes. Big deals closing can be exciting but also can overshadow the real direction that your business is going in.
Small Business Metrics
Several analytics are very important. If you are limited with time and funds, Customer Acquisition Cost and Revenue Growth are the most important. These will give business owners an idea of how to get more sales and necessary measures needed to improve the business.