When you are starting your business/ startup, time is usually very hectic and tends to pass by flying. It is very important to measure and consider what is the growth your company is having and which areas could be improved or are having the least progress.
The two most common scenarios for an early-stage company are that is growing very rapidly but unorganized or that the founders are focusing mainly on the product and leave sales and marketing as a second priority. According to Mark Cuban “Sales cures all! Know how your company will make money and how you will actually make sales”.
I couldn’t agree more with Mark Cuban, “Sales is a numbers game” as a startup founder you need to measure the metrics that really matter to identify if you have a healthy organization depending on the life stage of your company and what are the sales channels that are having the most impact on getting new revenue.
Our startup Linc, being a SaaS EdTech company use some key indicators to identify our progress, here are some of the metrics that we measure that could help you identify how your company is growing:
- ARR: Annual Recurring Revenue.
- MRR: Monthly Recurring Revenue.
- CAC: Customer Acquisition Cost. Sum of all your sales and marketing expenses over a given duration and divide it by the number of customers acquired in the same period.
- Growth Persistence: Normal for a successful B2B SaaS is 80% annually.
- Churn Percentage: Number of clients leaving in a determined period.
- Average Deal Size: Sum of closed deals divided by numbers of closed clients in a determined period.
- Sales Cycle Length: Total days required to close all deals divided by the number of closed deals)
It is very important to continuously measure the progress that your company is generating to identify what is working well and what could be improved, especially in technological companies. Measuring what is important is crucial for the well-being of your organization.