his overhead costs .
To make matters worse , Bob was not tracking his customer satisfaction levels . As a result , he did not realize that some of his new menu items weren ’ t being received well by his customers .
As time passed , Bob ’ s sales began to decline , and he could not figure out why . He continued to add new items to the menu , hoping that it would bring in more customers , but that only made things worse . One day , Bob realized that he was in trouble . He was losing money , and his coffee shop was on the brink of bankruptcy . He reached out to a business consultant for help , and they immediately identified the problem : Bob had not been keeping track of his key metrics .
The consultant helped Bob implement a system to track his inventory levels , employee schedules , and customer satisfaction levels . Bob also began to monitor his cash flow , revenue , and expenses .
As a result , Bob was able to identify the problems that were causing his sales to decline . He realized that his new menu items were costing him more than he was earning , and he adjusted his prices accordingly . He also reduced his staff levels and cut back on his overhead costs .
Bob also took the feedback from his customers seriously and removed the menu
“
In today ’ s business world , keeping track of key metrics is critical to ensuring success . Metrics are measurable values that provide insight into how well a business is performing . By monitoring metrics , business owners can identify trends , track progress , and make informed decisions to improve their operations . items that weren ’ t being received well . He focused on the items that were popular and made sure that they were always available .
Slowly but surely , Bob ’ s coffee shop began to turn around . His sales increased , and he was able to pay off his debts . He also had a better understanding of his business , and he was able to make informed decisions to improve his operations .
In the end , Bob realized the importance of keeping track of his metrics . He learned that by monitoring his metrics , he could identify problems early on and make changes to improve his business . He also realized that he didn ’ t have to do it alone and that there were experts who could help him along the way .
From that day on , Bob made it a priority to keep track of his metrics . He knew that it was the key to his success , and he was determined to never make the same mistake again .
Towards the end of 2014 I borrowed a book from my friend and founder of Aquila East Africa Mr . Kester Muhanji . It had an interesting title that tickled my business knowledge antenna . The author Duncan Bannatyne titled it “ 43 Mistakes Businesses Make ”. The lessons I picked changed my perspective on our business . I questioned our business plan , our model , our organisation structure , our value proposition , our pricing model and all our outflows .
It was shocking to find out that many people were eating our lunch and leaving us out of profits . Why do you need big office space ? To impress who ? Why do you have the fastest internet ? Why have five persons yet you could have two or three well compensated high performers to cover the roles ? How come you are maintaining a big fleet yet you have less than 100 client runs a month ? Could you outsource accounting and human resource management instead of hiring entry level guys that make you look bad ? Is it possible you need an office administrator to double up as a receptionist and accounts clerk ? Which processes in your business can you automate and move completely online ?
In today ’ s business world , keeping track of key metrics is critical to ensuring success . Metrics are measurable values that provide insight into how well a business is performing . By monitoring metrics , business owners can identify trends , track progress , and make informed decisions to improve their operations .
There are countless metrics that business owners can track , and it can be overwhelming to know where to start . In this article , we will discuss some of the most important metrics that business owners ought to keep an eye on to improve their operations .
Revenue & Expenses
This starts from your setting up variables and operational costs . Revenue is the most basic metric that business owners need to monitor . It refers to the total amount of money that a business generates from sales or services . Monitoring revenue allows business owners to track their sales performance and identify areas for improvement .
It is important to note that revenue alone does not give a complete picture of a business ’ s financial health . Business owners should also track their expenses to ensure that they are generating a profit . You may be making good revenue but your business burn rate is higher and faster than your harvest . Question every expenditure , its value and sustainability . Why have a Ferrari deliver cents worth of goods ? Have you employed a high value staff to run what a fresh graduate can do ?
Customer Acquisition Cost ( CAC )
Customer Acquisition Cost ( CAC ) is the amount of money that a business spends to acquire a new customer . This metric is important because it helps business owners determine the return on investment ( ROI ) of their marketing campaigns . Including the pitching trip costs - teas , flights , fuel , time , material production costs for samples and entertainment meant to woo clients .
To calculate CAC , divide the total amount spent on marketing and sales by the number of new customers acquired during that period . Business owners can use this metric to determine which marketing channels are most effective and adjust their strategies accordingly .
Customer Lifetime Value ( CLV )
Are your customers buying all products you ’ re offering ? I discovered some clients only knew us for one product or service line . Customer Lifetime Value ( CLV ) is the total amount of money that a customer is expected to spend with a business over their lifetime . This metric is important because it
30 MAL53 / 23 ISSUE