Here are 16 basic metrics every biz owner should know : But, most founders don't know their KPIs.
There are two main types of KPIs. 1. Lagging Indicators These measure past performance, revenue, and customer activity. 2. Leading Indicators By analyzing both, you better understand your biz, ad how to scale it: 1. Annual Contract Value (ACV) How much is each contract worth per year? Total monthly contract x 12 = ACV Ex: $1,500 x 12 = $18,000 ACV 2. Annual Recurring Revenue (ARR) Identifies how much recurring $ your biz makes per year. (Overall subscription cost per year + Recurring revenue from add-ons or upgrades) - Revenue lost from cancellations = ARR Ex: ($1M/yr Subscriptions + $200k Recurring upsells) - $300k Lost to churn = $900k ARR 3. Average Revenue Per User (ARPU) Quantifies the $ value of each customer. Total revenue / Average # of users = ARPU Ex: $1M/yr Revenue / 1,000 Users = $1,000 ARPU 4. Customer Acquisition Cost (CAC) Identifies the total cost to get a new customer. (Cost of sales + Cost of marketing) / New customers acquired = CAC Ex: ($500k Sales commissions ...