Five Metrics New Businesses Should Keep Track Of

Getting a business started can be quite overwhelming. In the beginning, there is so much information coming in that business owners can be left struggling to figure out what is important and what isn’t. And even after the initial chaos settles down, it still takes time and focus in order to discover where things are going right and what needs to change.

Even if a business owner doesn’t have access to a lot of data at the start, the volume grows with each passing day, thus becoming more representative of the company’s activity. Entrepreneurs can then use this information to track how well the business is using its time and resources, as well as predict how the next few quarters are trending. So what should leaders focus on? To help, five associates of YEC Next offer their insights into which metrics are essential for starting businesses to keep track of in order to improve overall operations. Here is what they said:

Members discuss a few metrics newer businesses should pay close attention to.

PHOTOS COURTESY OF THE INDIVIDUAL MEMBERS

1. Cost Of Doing Business

Pricing a product or service is so important. It can literally make or break your business. It can be especially difficult in the beginning. For products, the rule of thumb in pricing is to start high, as you can always go lower. If you offer services, it’s important to track how long that task actually takes, so you can determine the real cost, overhead and staffing time, and then price accordingly. – Angela Delmedico, Elev8 Consulting Group

2. Customer Acquisition Cost

One metric which is extremely important for new businesses to keep an eye on is their customer acquisition cost. The way for businesses to track this is to choose a time period and divide the cost of marketing and sales by the number of customers acquired. Ideally this number shouldn’t be too high. Learning to keep your customer acquisition cost relatively low is going to be important in the long run. – Bryan Driscoll, Think Big Marketing, LLC

3. Retention Rate

Definitely watch the retention rate. We all want to know the percentage of loyal customers that stay with us. On the other hand, we want to know the percentage that leaves. This percentage helps us put more time and effort to attain and retain more clients. The ultimate goal is to keep your retention percentage as high as possible. It also puts that cost to acquire a client to good use. – Jessica Baker, Aligned Signs

4. Engagement

Although essential metrics vary based on the type of business (business-to-business versus business-to-consumer), tracking engagement is essential across the board. Especially early on, keep track of the number of people visiting your website, answering phone calls and responding to emails. These potential customers are intrigued by your company and their numbers can help you gauge your ability to communicate your value proposition. – Kyle Wiggins, Keteka

5. Your Hourly Rate

When you’re in the early stages, it’s easy to just jump into activities and run with them. You need to get into the habit as soon as possible to track your time. Whether you are working on client work or your business, you need to know where your time is spent and understand the value of it. When you understand this, you can better prioritize your responsibilities and know where to hand off work. – Reb Risty, REBL Marketing