Nicole Fenda, writing in smallbiztends.com, had a useful post on five key metrics you should follow this year (and other years, actually). If you budget, also track your actual vs. the budget for the five. As usual, we’ve edited the post to put our own .02 in:
1. Total monthly revenues. We recommend watching this on a cash basis, because cash is king at the moment. Match the revenues vs. last month and last year, to see how you’re doing.
2. Total monthly expenses. We recommend watching this on a cash basis, too, because you can get an quick idea of where you are on a cash basis. If your revenues appear over a number of months,because of contractual requirements, what’s the forecast?
3. New clients or customers. How many did you gain this month, compared to last month or a year ago? What was the source? Referrals? Traditional advertising? Web site? List them Match this against your promotional expenditures. What worked, and what didn’t?
4. Repeat clients or customers. Ones that renewed service contracts or came in again. A lot of your advertising should be to retain customers, not just get new ones.
5. Customer losses (this was missed by Nicole). It should be less than 5% of your total customers. Did someone talk to them to find out why they didn’t renew? This might seem obvious, but you’d be surprised how many companies overlook ‘winback’ programs. Winback programs can be astonishingly effective; usually the reasons for dropping can be fixed easily. Valueable customer feedback can be gained, too.
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