Episode A1.010 Reading the Metrics

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Introduction
We all know the statistics on the startup failures.  We all know business owners who have started businesses that are barely paying the owners a living wage.  What separates those kinds of businesses from the ones that generate revenue, make healthy profits and allow the owner to prosper?

Metrics.  Well, the proper interpretation of the metrics.  In this episode we will look at the most meaningful metrics for startups - no matter where you live.  We will also look at KPI’s and how to customize both.

Tune in to the metrics on your dashboard that allow you to steer clear of pitfalls and pivot to leverage your industry’s opportunities.

Have a great business week.
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Show Objective
Learn to build out a dashboard with metrics and KPI’s that you can easily access, analyze, and act on.  These metrics will help you:

• Pivot 
  
• Avoid pitfalls
  
• Grow, develop
  
• Communitcate with lenders, investors, strategic partners, and, when you have one - your Board.
  

Metrics will give you a roadmap so that you aren’t wandering around your industry landscape without a clue.

Key Concerns:
Why are metrics important?  What are founders supposed to get from metrics?  

• Each metric relates to core operations
  
• Each metric indicates what’s working, and what isn’t working in the business
  
• Discuss how to identify your most important metric - the driver of your company’ s growth
  

It’s best to be very specific with your metrics, to drive towards your goals.


What You Need to Know
You need to know what metrics are.  You need to know what KPI’s are, too.  Then, you need to know what it means to customize and where to best find the customization strategies to develop meaningful metrics.


What You Need to Do:
Here are the steps you can take to develop your dashboard.  You want it to contain the most meaningful metrics and KPI’s.

1. Determine what the primary driver of growth is for your company.  (Look back at your business plan for ideas.)
   
2. Reverse engineer from that driver.
   
3. Make a list of everything you can do to fuel that driver of growth & revenue.
   
4. Prioritize that list.
   
5. Analyze the cost of each.
   
6. Assign the tasks associated with each one.
   
7. Reprioritize if necessary.
   
8. Know your burn rate, customer acquisition costs, the lifetime value of each, revenue, costs of goods sold, profits & loss statements - all of your financial reporting can come in handy when identifying the most meaningful metrics.
   

Check out these resources:
Teddy Roosevelt in his famous, “Citizenship In A Republic” speech given in Paris, France April 23, 1910: https://www.mentalfloss.com/article/63389/roosevelts-man-arena

“34 Types of Startup Metrics To Measure (With Examples)”
12/6/19, Carl Potak
https://startupdevkit.com/types-of-startup-kpis-metrics-to-measure-with-examples/

StartitUp: https://startitup.co/guides/374/aarrr-startup-metrics
AARRR (Startup Metrics)
Forbes
https://www.forbes.com/sites/scottlenet/2020/01/26/startup-dashboards-for-dummies/#1b580a962db3
 
Dashboards For Dummies, Jan 26, 2020, Scott Lenet
Pyramid Analytics, July 16, 2019 https://www.pyramidanalytics.com/blog/details/blog-why-your-business-need-key-performance-indicators
Stephen Covey, 7 Habits of Highly Effective People
https://resources.franklincovey.com/franklincovey-blog/habit-2-begin-with-the-end-in-mind
Karola Karlson wrote in “12 Business Metrics that Every Company Should Know” https://www.scoro.com/blog/12-business-metrics/ that there are 12 metrics

Shortform: Pivots in Startups: Every Pivot Type, Explained, Allen Cheng, March 18, 2020https://www.shortform.com/blog/pivot-startup-definition/
Consider using a system like the 12 Week Year, by Brian Moran.
o   https://12weekyear.com

Previous Show: Episode A1.009 Business Deductions
Next Show:Episode A1.011 Your Next Steps

Written by Wendy Dickinson

* I am not a CPA and the recommendations given in this show do not constitute legal or financial advice. Seek professional advice for all legal and financial matters. 

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