Should you measure the growth in your business?

This is a great question we are often asked. It comes with an obvious answer – “absolutely yes, you should measure the growth of your business”. If you are not growing it is very likely that you are in fact going backwards relative to your competition!

To gauge your business’s growth, there are several key factors you should track. The most effective approach is to examine these factors together to gain a clearer picture of your businesses progress.

Revenue is often the first indicator people look at. It shows how much money your business is bringing in and, ideally, it should increase over time. However, it is important to remember that higher revenue often comes with higher costs, so it is crucial to balance revenue growth with expense growth.

Profit, which is the money left after expenses, is another critical measure. While profit growth is a positive sign, it is not always the complete picture. For example, even if your profit does not increase significantly, a healthy profit margin could still indicate a well-run business. For startups, focusing on achieving profitability early is essential.

Market share reflects your company’s position relative to competitors. For newer businesses, expanding market share is a priority. Without gaining ground on competitors, achieving revenue growth can be difficult unless the market is growing rapidly.

Customer acquisition is a powerful driver of growth. By attracting new customers and converting them into sales, you not only increase market share but also boost revenue. It is also important to understand your customer acquisition cost/s.

However, customer retention is equally important. Retaining customers ensures that the growth driven by new acquisitions is sustainable over time.

Lastly, team size can be an important growth metric. A growing team should mean you are scaling operations, but it’s important to ensure your payroll costs are in line with the value each new hire brings to the business. More people do not automatically mean more revenue or more profit.

Aim at nothing hit nothing. But if you are aiming at something, be sure to measure it and measure it against key metrics such as these.

Reach out for some help to SAS with this - we can help you determine the key metrics and get you focused focussed on measuring these key success factors.