Scaling a business can be an exciting time, but it also brings its own challenges. One of the most important things business leaders of high-growth companies need to do is monitor key metrics that can determine the success of their scale efforts. These metrics can provide valuable insights into what works and what needs to be adjusted to ensure sustainable growth.
Below, 11 gotechbusiness.com Business Council members share some of the most important metrics business leaders should track as they scale their businesses. By paying close attention to these metrics and making data-driven decisions, you can position your business for long-term success as it grows.
1. Burn rate
An important metric that business leaders of a fast-growing company should monitor to ensure successful scaling is the company’s burn rate, the rate at which it spends money. Controlling the burn rate can help ensure that the company has sufficient resources to support growth while avoiding cash flow problems. – Daniel Danino, Volta metals
2. Lifetime customer value
Tracking customer lifetime value is an important metric that helps leaders manage and plan for growth effectively. It allows business leaders to ensure that investments in all areas of business benefit customers in the long run. Tracking customer lifetime value has become accessible in recent years with innovative solutions that calculate it automatically based on purchase data and other historical information. – Michael Scribman, APS Global Partners Inc.
3. Feedback from team members
An important metric to monitor is the feedback from team members. Often they are the ones who will see the success or possible obstacles of rapid growth. It’s important to ask for feedback, as many team members don’t feel comfortable reaching out to supervisors, especially if there’s a potential issue. – Lori Rehn, Pro-Line Industrial Products, Inc.
4. Customer Acquisition Costs
Business leaders of a fast-growing company need to keep an eye on customer acquisition costs (CAC) to ensure sustainable scaling. They must ensure that the cost of acquiring each new customer does not increase disproportionately. CAC helps make informed decisions about marketing strategies, product pricing, and customer retention efforts, leading to profitable growth. – Malcolm Allen, Graduated America
5. Financial health
Customer acquisition and retention are important to monitor. However, they do not give leadership a good insight into the health of the company, which can easily be jeopardized by rapid growth. I’m not focusing on one area, but one area I won’t ignore is financial health. A current ratio or some measure of cash position to ensure that all current liabilities can be covered is essential for responsible growth. – Kevin Amolsch, Pine Financial Group, Inc
6. Retention Rate Data
Retention rates are an important metric for businesses of all sizes. Retention rates become even more important as the business grows. It can measure how successful a company is at retaining its customers and employees over time, indicating the strength and stability of the company. Companies can also use retention data to identify areas where improvement is needed and make adjustments from there. – No Nick, Recruit Gyan
7. Productivity per employee
As I coach companies that are growing rapidly, we find that productivity per employee is a metric that is critical. To handle the increased caseload, we are adding people and technology and monitoring the long-term impact. If planned correctly, scaling initially lowers profit margins and then achieves equal or higher productivity. The key is to pave the way to do this over and over again. – Jerry Kan, Brilliant aging
8. Return on investment
Leaders must monitor their return on investment (ROI). This metric is vital when you run a business to know you are making money. We have rapid growth spurts in the spring and rely heavily on paid advertising. We also offer special offers like free shipping and BOGO offers, so we have to monitor our ROI very carefully to make sure we eliminate overheads. – Tammy sons, Tn Nursery
9. Team capacity
Track your team’s capacity. We aim for 85% billable hours and as soon as a department is at 80%, we start looking for someone. We also re-evaluate our systems and processes every quarter to make sure we don’t create too many workarounds that slow us down. – Ryan Lucia, Such and such media
10. Cash Flow
For me, the absolutely central and therefore indisputable measure of sustainable successful scaling is cash flow at the level of the individual unit produced (overweight at the unit economy level). A clean calculation can work wonders in that respect. – Matthias Walter Eser, ESER Capital Vermögensverwaltung GmbH
11. Monthly Income
We strongly believe in the old adage “Revenue is vanity, profit is common sense, but cash is king.” That’s why we track sales monthly, define our break-even point and monitor it weekly, especially in volatile economic conditions like the one we’re in right now. In addition, we also try to add new products and new services that can help diversify revenue streams. – Daniel Levy, Government office furniture