Over the course of this 4-part series ...

Welcome to the third article in a four-part series where we will unpack how to fuel small business growth by focusing on the metrics that matter most from the (very) top of your organization down.

Articles in this series:

• Fueling small business and mid-market growth: Mission and strategy
• Fueling small business and mid-market growth: Empowering employees

Our conversation will focus on creating the metrics that best align with your Mission and Strategy, Empowering Employees, Data Analytics, and Technology.

Because what you measure … GROWS!! 

Or SHRINKS, so let’s be honest: Growth in all areas of your business isn’t always the best idea.

But we’ll get further into that later in the series - so let's get started.

Addressing the unaddressed needs of your business

Because this is a metrics conversation, you can brush any of the words off of the page to reveal that there’s a metric worth considering under there. But, just to be ridiculously clear, let’s move on to some Data Analytics to consider keeping your eye on.

I mean, this is a talk about metrics that matter, right?

I’ve seen some incredibly complex math businesses use to track metrics over the years, but I like keeping it simple.

We need to be able to answer some very basic questions.

Let's start by using our data to answer:

1. Are we focused on the right things?
2. Is our quality where it needs to be?
3. How are we doing financially?
4. Where are our opportunities and challenges?
5. Are our customers happy?
6. Are our employees happy?

For successful businesses, looking backward into data is no longer acceptable.

Let me rephrase that, relying on a financial report to understand your business is no longer adequate. To be successful, our companies must evolve into a future-focused mindset.

I realize some of these concepts are very new – it’s okay. This article is a safe space. Plus, I have some examples for you:

I want to call out one little metric found under Your Company.

Please consider taking a closer look at your INTERNAL RETURN ON INVESTMENTS (IRR).

Simply put. Are you attractive to buyers?

Many of us are in the throws of an early business lifecycle… but the reality is, and more importantly, the pandemic taught us, you may need to sell your business at a moment's notice.

Life happens.

And would you happen to understand your business economics well enough to have a realistic conversation about its worth? 

A quick word on cash flow.

If you take ONLY one thing away from this article... please understand.

"Cash rules everything around us." And poor chase flow is a "Ghost-Faced Killer."

In fact, poor cashflow is the #1 cause of business failure.

And according to the US Bank, 82% of businesses fail as a result of cash flow issues.

Or, as WuTang's band leader, The RZA elegantly put it, without positive cash flow, "You can't punch your way out of a wet paper bag with a pair of scissors in your hand."

Please take some time to understand your company's cash flow.

Try it now

Here are some metrics with definitions to consider:

• Unit economics - a method applied to analyze a company’s cost-to-revenue ratio in relation to its basic unit, hence the term; helps you understand the “source” of your revenue.
• Payroll Ratio - the appropriate levels of staffing for your company. Remember the potentially negative effects of labor reaching or exceeding 30%.
• Inventory = Also known as cash you can't spend.
• Asset turnover ratio - your ability to generate sales from your assets. Compare Net Sales with average Total Sales.
• Cash Conversion Cycle - how long it takes to convert an investment inventory into cash.
• Cash Flow - the amount of money the company gets from sales, investments, and other sources, minus the amount of money the company spends on things like salaries, supplies, and rent.