Small Business KPIs That Actually Drive Growth

First off, “growth” is a loaded term. It’s important to first define what you mean by “drive growth” before you can get a proper answer to the question - what are the KPIs that actually drive growth.

For simplicity, let’s assume growth means profitability, because if you’ve been reading our articles for any length of time, you know that I believe growing profit is much more important than adding to top-line revenue.

The small business KPIs that actually drive growth are the ones tied directly to your cash flow, your capacity, and your client experience. But beware, if a metric doesn’t help you make a better decision, it’s little more than digital wallpaper.

As a fractional CFO, we track 15 cash flow drivers. Then we’ll typically identify at least 5-7 additional key numbers that tell the whole financial story - we want to know precisely where the real money’s made, what’s actually draining resources, and how to protect both profits and purpose.  

Make the Shift

If you’re tracking a bunch of metrics but still feel like you don’t know which ones really drive growth in your small business, I have some good news for you.  You don’t need tons of metrics!  You only need the right few meaningful metrics - those metrics that truly measure your progress on your strategic growth goals. Growth comes from focus, not from counting every grain of sand.  I had a business coach who once said, “simple scales, complex fails” and this can be applied to the information overload that makes your financials too complicated to be useful to you.

Try This

First I want you to visualize and define what “growth” actually means to you? What are all the ways you want your small business to grow. Write it down, in detail. Take your time. Be honest with yourself. Think big. Then, once you’re satisifed with that definition of your growth, your vision, you’ll pick your top “success” metric. Now answer this one question honestly: Does this metric tell me what’s really working to drive growth in my business or am I just tracking what’s visible and easy to track?  If the answer is yes, keep tracking it and use it to make decisions in alignment with that vision you wrote down.  If the answer is no, ignore that metric for now!  You can always track more, but when we are talking about KPIs, simple, relevant, and meaningful is the goal.  

Not sure if you’re metrics are up to snuff?  Book a strategy call with Jennifer, our resident Meaningful Metrics Maven, to get moving in the right direction.