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Key Business Metrics To Look Out For In 2021

Building a successful business is always a rollercoaster. One day, everything looks to be going perfectly fine. The next day, you’re dealing with unexpected issues that seem like they have no end. Amid all the highs and lows, you need to find ways to keep your business ship sailing towards your business goals. One of the most critical ingredients to the success of any business is a good understanding of the way your business is performing. That tells you what you’re doing right, where you’re going wrong, and the changes you need to make. 

Learning the skills needed to collect and analyze business data is one of the keys to taking your business to the next level. Fortunately, even without a lot of experience, you can take advantage of meaningful metrics to periodically see what happen in your business. So, do you want to know if your business is heading in the right direction or if you need to make changes? Do you want your business to meet its success goals for 2021? Here are some key metrics to keep your eyes on.


Sales revenue


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Sales revenue is simply the income you make from selling your products and services minus the various costs of making those products or services available. Beyond the leading indicators of profits and loss, you need to mine a bit deeper for essential data trends and meanings. You also need to correlate your sales data with other sales costs like price changes, seasonal forces, advertising campaigns, competitive actions, etc. You can also delve into more sophisticated metrics like returns on assets, returns on sales, turnover ratios, etc., to predict how your business will perform in the following months.


Net profit margin

Your net profit margin should indicate how efficient your business outfit is for important profit generation compared to its revenue. Your net profit margin indicator is critical as it helps you predict your company’s long-term growth and if the cost of running your business does not outweigh the income you make. A simple way to measure your net profit margin is by calculating your monthly revenue and reducing all your sales expenses. If your net profit margin is too low, one way to improve it is by increasing your income. 


Customer loyalty retention

Your customers are the essential components of your company’s success, and customer loyalty is at the heart of it all. Customer loyalty retention has to do with attracting the customer your business needs, getting them to buy from you, and finding ways to keep them coming back to do business with you. The best way to continue building customer loyalty is by treating your clients the way they want to be treated. In other words, you are keeping your customers happy.

You can use three main ways to measure your customer retention loyalty. One way is to rely on purchase analysis. The second way is to take advantage of feedback your customers leave at the point of purchase or the reviews they leave on your online platforms. And the third option is to use customer surveys. Experts believe that a 5% increase or improvement in customer retention generates a 20% to 100% increase in profits. 


Gross margin


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Every business must aim at higher revenues than costs. And a practical method of tracking your profit is by paying attention to your gross margin percentages. This percentage should indicate to you how much profit your business is raking in from each sale. A more significant business gross margin translates to increased profits for your company. That means you need to ensure that you put the necessary measures in place to ensure your gross margin grows steadily or, at least, remains stable as your business continues to grow. If your gross margin starts dropping, you need to start finding out what’s adversely affecting it. 


Operating productivity

Another vital component to the success of any business has to do with the staff. And it would be best if you took the time to keep track of how they are doing to help determine productivity levels. For example, if you have unhappy or discontent employees, you can quickly put the success of your business at risk. On the other hand, a happy and highly productive staff can be one of the best assets your business can ever have. Aside from your team, you can also measure operating productivity from other areas of your business. For example, for sales productivity, all you need to do is divide your actual revenue by the number of salespeople you have on your team.


The cost of customer acquisition

As important as it is to attract customers, you don’t want to do so at the risk of your business collapsing. Although it may not seem like it, so many things contribute towards acquiring a single customer. You can calculate customer acquisition cost by dividing every cost to acquire a new client (marketing expenses and other perks) by how many customers you acquire in a given period. For example, if you end up spending about $8000 on marketing in one month to attract 40 clients, your cost of customer acquisition is $200. 

Another thing you need to keep in mind is the lifetime value each customer offers your business. You can take the time to evaluate the customer lifetime value of different areas of your client base to help you understand which areas rake in higher profits. 




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Overhead involves all the other expenses of running your business that does not directly translate into your products and services. Such costs range from rent expenses to employee salaries, utility bills, and legal fees. It is crucial to track your overheads as they determine how much revenue you need to generate from your business to cover those costs. Tracking your overhead also gives you an idea of how much of your income goes into your various overhead expenses instead of producing items that directly generate revenue for your company. 

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