Starting a business means juggling a lot but tracking the right metrics can help you stay focused and on course. Here are three essential metrics every new business owner should keep an eye on—and why they matter.
- Customer Acquisition Cost (CAC)
How much does it cost you to acquire a new customer? This is your Customer Acquisition Cost (CAC), and it’s essential to understanding your marketing and sales efficiency.
Why It Matters: If your CAC is too high, you’re spending too much to gain each customer, cutting into your profits. Knowing your CAC helps you adjust your marketing budget and find cost-effective ways to grow.
- Monthly Recurring Revenue (MRR)
If you have a subscription or service-based model, tracking Monthly Recurring Revenue (MRR) is a game-changer. This metric shows your predictable monthly income from clients or subscribers.
Why It Matters: MRR helps you forecast revenue, making it easier to plan, manage cash flow, and identify growth trends. Plus, stable MRR means you can focus on scaling, not just covering expenses.
- Customer Retention Rate
Bringing in new customers is important, but keeping existing ones is even better. Customer Retention Rate measures how many customers stay with you over time.
Why It Matters: Retaining customers is more cost-effective than acquiring new ones. A high retention rate means satisfied customers, stable revenue, and often, a stronger brand reputation.
Final Thoughts
By tracking these three metrics, you’ll gain insights into your business’s health and make data-driven decisions to grow sustainably. At Empire Accounting, we help new business owners keep their finger on the pulse of what matters most. Let’s make sure your numbers are working for you!
