Startup performance is important to monitor, especially at the initial period of your growth. Performance metrics reveal if your employees are working as per expectations and the company is moving in the desired direction. In this article at Medium, Sarath CP discusses 4 startup performance metrics to fast-track your progress.
Measuring Startup Performance
As per a recent Harvard research, experienced entrepreneurs displayed better startup performance than the amateur or failed business owners. Business owners that understood market trends and had successful ventures earlier, tend to succeed to better. To fast-track your startup performance, measure the following 4 metrics:
Revenue Run Rate: This is a key startup performance metrics that every entrepreneur must measure to understand company’s financial status. It is also called as sales run rate. The formula is mentioned below for your perusal:
Run Rate = Revenue in Period / Number of Days in Period x 365
Customer Acquisition Cost (CAC): This metric measures the cost that a new customer acquisition imposed on your company. Consider a specific time period of the year and divide by the marketing cost to get the result. The lesser the CAC, the more improved your startup performance is. If you have launched a new product or service, CAC is likely to be higher. So, evaluate this metric along with other metrics to get accurate analysis for your startup performance.
Customer Lifetime Revenue (CLR): This measures the revenue your company collects from frequent customers. You need to run the company for a significant period to have accurate results for CLR. If you know this metric’s results, you will know how much to pour into CAC. CLR also reveals whether your startup offerings are valuable to customers or not.
Margin: Based on this startup performance metric, you can decide if the company has achieved its goals. The simplest way to calculate margin is to find out if revenue is more than the costs and expenses.
To view the original article in full, click on the following link: https://medium.com/swlh/4-key-performance-metrics-every-startup-must-track-69c5c1706c9