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Four critical business metrics that will help your business grow
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When you start a business, things can get a little overwhelming simply because of all the varied aspects you have to keep an eye on and all the decisions you have to make to stabilise and grow your business. There are some business metrics, however, that are more critical than others, and you should ensure to monitor these consistently.
1. Sales revenue
While there are several fancy metrics and ratios that you will hear people tell you to keep an eye on, sales revenue is still the most important. Irrespective of your business type, industry, or model, tracking your sales revenue, its growth month over month, factors affecting it positively and negatively, etc., is something you should religiously do. Essentially, your sales revenue is your income from the sale of goods and services. Having a Current Account in place will make it easy for you to keep track of all your transactions with customers, including returns, and manage your cash inflows well. Hence, you should open a Current Account immediately.
2. Cost of Customer Acquisition
This metric is crucial given the reliance on marketing and advertising in business today. Your customer acquisition cost includes the cost of all your efforts, including promotions, marketing, etc., to acquire a customer divided by the total number of new customers over a given period. Say you spent Rs 25,000 on running Facebook ads for a month and acquired 20 new customers, and then your customer acquisition cost would be Rs 1,250. This is a simplified example; in actuality you will be undertaking various efforts to acquire new customers. Once again, having a Current Account will help you have a clear idea of how much money you are spending to acquire customers and how effective your investments are for the same.
3. Expenses – big and small
One mistake many new businesses make is only focusing on big expenses such as inventory and payroll. If you have a workplace ritual like ordering a cake for every employee’s birthday and work anniversary, it is a nice gesture, but you should not overlook such expenses and keep an eye on the same. Or else, at the end of the year, when you look at your financial statements, you may be surprised to see this amount to a number you were not expecting. This is one of the helpful features of a Current Account – it helps you easily track your expenses, big and small, on the go through your bank’s mobile app.
Additional Read: Why having a current account is important
4. Best and least performing offerings
Whether you are providing a service or a product, chances are you are offering more than one type or variation of it. Every business has a bestseller, the one product or service that brings in the most business or revenue and at the same time, it also has the product or service that has the lowest sales. It is important to look into your overall revenue and see what your category wise revenue and margins are.
The key to keeping an eye on all these critical business metrics is having an efficient Current Account in place, as it is the medium for all your business’s banking and financial transactions. If you are still using your personal Savings Account for your business, make sure to open a Current Account soon.
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