As a startup entrepreneur, you must have been asked often, “How is your venture doing?”. If you do not have a ready answer for this normal question, read on.
There are various ways in which you can measure your startups performance. I am highlighting some key metrics to follow:
1. Revenue generated
Revenue is what a startup lives for. Make sure that you are able to measure and count how much revenue you are making in your business. You can further analyse it along product/service lines, per month revenue, growth trends in revenue, pipeline revenue (expected orders for next few months).
2. Expenses made
While it may take some time for revenues to start coming in, the expenses start from day 1 – right from incorporation expenses, website development, to the servant who mops the floor! You need to keep an eye on what your expenses are – which of them are revenue generating expenses, and which ones are non-revenue generating. Also, keep your fixed costs low – always keep checking if your expenses are increasing more than your revenues.
3. Cash in hand
Cash is king! Its like brushing your teeth everyday – take a look at your bank account and see what can be done to manage your show – the best entrepreneurs can take this as a pressure as well as motivation.
4. Number of customers
Startups cannot live without customers. Its always important to measure how many customers you have, growth trend of customers, paid/unpaid customers, unique visitors to website, customer satisfaction score etc.
5. Product metrics
For a product company, time to market is a critical metric. You may also benchmark this with your original plans, and measure variance. Other metrics include number of errors (and reduction in errors), cost of product development etc.
6. Operations related
HR and technology are key areas which as a startup you cannot afford to ignore. Depending on type of business, you may look at number of people in your company, productivity of team, time taken to close sales, time taken for customer delivery etc.
While there maybe numerous choices and some confusing parameters, it is important to prioritize. For instance, when you visit a doctor, he checks for your health by diagnosing your temperature, blood pressure and heart rate. If you can develop 4-5 key metrics for your business, and drive each of them on a daily basis, you will be able to create a difference!
Note – want to find out what metrics I follow for Nurture Talent Academy, read the section about the author below!
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