How to Know What Metrics Matter for My Business

If you’ve ever wondered how to know what metrics matter for your business, you’re not alone. Most founders I meet aren’t tracking anything but their morning bank balances, and if they are tracking anything else it’s only what’s easily visible. Still, they are not tracking what’s actually useful in helping them make better, faster decisions.

You’ve probably either inherited reports and keep using them “because that’s how we’ve always done it” or you may have just copied industry benchmarks that have nothing to do with your actual goals. This leaves you frustrated and wondering what numbers actually matter in your business.

Inside FutureView’s CFO Advisory service, we start with meaning before measuring. We help our CEOs and their team formulate the Big 6 Strategic Goals. From there, we know what metrics matter, and what to track to measure progress toward those strategic Big 6. Our goal isn’t to count everything, it’s to connect the right numbers to the results that matter most - stability, profitability, and peace of mind.  As a matter of fact, we try to limit our metrics to the fewest, most impactful measures possible.  Because when you measure everything, nothing seems important, and you’ll just end up with information overload.  

Make the Shift

It’s time to cut the noise and learn what numbers matter in your business and where to find them.  Trust me, it’s not that you’re “bad with numbers,” you’re not, I promise. It is just that you’ve been taught to chase too many numbers, many of which are the wrong ones. When metrics align with your strategy, you stop guessing and start confidently leading.

Try This:

Three metrics that truly are essential to every business:
1.  Profitability - but not just bottom line profit, profitability by offer (product/service).  You have to know which of your sales gives you the most profit, so if your systems are not set up to tell you this number easily, then start there first.

2.  Overhead costs - these are the costs that must be absorbed by every dollar you make.  In other words, your sales not only have to cover the cost of those sales (like direct labor, materials, and the costs to produce and deliver your offers) but also all the other costs of your business.  Understanding that your prices must be high enough to cover both direct and indirect costs is essential for a healthy bottom line.

3.  Net Cash Flow or Free Cash Flow - and no, I am not talking about the balance in your checking account when you log in to check it each day (yep, I know you’re logging in every morning to peep at your balance.) What I mean by free cash flow is after all expenses and debts have been paid - what’s left for you to save, reinvest, or take a tax-free owner’s distribution?  The bottom line on your profit and loss is not going to tell you free cash flow - this is a metric that is calculated, forecasted, and tracked on a dashboard.  

Don’t have a dashboard yet ?  You definitely need one if you want your business to grow faster and easier. Let’s talk we specialize in helping companies formulate the right metrics, and then getting them visible for everyone that needs to track progress on goals!