Reading Time: 2 minutes

Every growing business has employees brimming with ideas. Some even manage to implement them. Yet, with increasing expenses and complications they ignore to take their small business to the next level. This requires a certain discipline, skills and tactics which are relevant to the business. Also, the business should keep an eye on numbers, generally known as “Metrics”.


We have already studied the strategies to forward a sustainable growth story of a business. Following are few metrics which one needs to monitor in order to maintain the growth :

1. Revenue :

Income from purchases of goods and services less the sales returns or damaged products is revenue. One needs to find deeper meanings and trends in the data which has been accumulated over the years.

Advertising campaigns, price changes, seasonal forces, competitive actions, and other cost of sales should be compared to sales data. The Asset Turnover Ratio, Return on Sales, and Return on Assets are a few ratios which help the company to assess the performance against others. In order to survive and sustain, one must continually analyse oneself in comparison to its immediate competitors to begin with.

2. Customer satisfaction and retention:

CSat is all about knowing how happy is your consumer. Also, it is important to attract the right customer and keep them your user in the cluttered market. They should buy often, buy in more and be your advocates. Treat the consumer well and analyse the feedback regularly.

One can measure this by :
1) Surveys
2) Direct feedback at point of purchase, and
3) Purchase analysis.
It should be a systematic and a regular process, rather than ad hoc implementation. According to Fred Reichheld and other experts, a 5% improvement in customer retention will yield between a 20 to 100% increase in profits across a wide range of industries.

3. Cost of Acquisition :

The total cost associated with acquiring a new customer is an important number. Also, a company should be aware of individual cost of acquisition over and above the absolute cost.

COA = Total Acquisition expenses / Total new customers over a given period

It gives you an idea of efficiency of your marketing and advertising investments. Over the period, it should go down as growth and your brand image goes up. Again, be sure to check industry norms for your type of business to see if you are competitive.


4. Operating productivity:

Obviously measuring staff productivity is important, and the reasons why are obvious. If you do not know how your staff is doing, then how can you truly know the inner workings of your own company? Staff discontent can put your company in serious jeopardy, while on the other hand, high staff productivity can be your best company asset.

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 salesmen. One can compare the productivity to industry standards ( refer industry statistics) or some benchmarks. VComply lets you comply with various KPIs and standards on the platform and monitor it for its performance.

5. Gross margin :

GM (%)= (Total Revenue – Cost of goods sold)/ Total Revenue

The higher the percentage, the more the company retains on each unit currency of sales to service its other costs and enjoy as profits.

Tracking margins is important for growing companies, since increased volumes should improve efficiency and lower the cost per unit (increase the margin). Improving productivity requires effort and innovation, and many companies charge ahead, not realizing that margins are going the wrong way. What you don’t measure probably won’t happen.

Previous                                                                                                                         Next

FavoriteLoadingAdd to favorites

Leave a Reply

Your email address will not be published. Required fields are marked *