Performance Metrics That Help Shape Business Decisions

The Two Types of Metrics Every Business Needs 📊 Every founder I work with eventually hits the same wall. They're drowning in data but starving for insights. Spreadsheets full of numbers that don't connect to any clear action plan. The problem isn't tracking the wrong things, it's mixing up two completely different purposes for metrics. While many of these metrics overlap (because good business metrics are good business metrics), I've organized them by their PRIMARY focus during fundraising vs daily operations. Think of it as two different lenses for viewing the same business. ➡️ VENTURE CAPITAL METRICS These tell a story of scale, momentum, and market opportunity. ARR and MRR show recurring revenue strength that investors love because it means predictable income streams. Growth rate demonstrates month over month momentum and shows investors you're accelerating, not just maintaining. Burn rate and runway answer the critical investor question: "How long will my money last?" CAC and LTV prove your unit economics work at scale and show whether more marketing spend will generate returns. Revenue multiples help investors benchmark your valuation against comparable companies. Churn rate reveals retention risk and tells investors whether you have a leaky bucket problem. Market size using TAM, SAM, and SOM shows this is a billion dollar opportunity, not just a nice business. Logo count provides social proof that other smart people believe in your solution enough to pay for it. ➡️ OPERATING METRICS These power decisions, accountability, and optimization. Active users, DAUs, and MAUs reveal real product usage patterns and tell you if people find value in what you've built. Conversion rates expose exactly where prospects drop off so you know where to focus optimization efforts. Sales pipeline health compares forecasted deals against closed deals, helping you predict revenue and spot problems early. Gross margin shows profitability of your core product after direct costs. Headcount and hiring plans manage your biggest expense category since most companies spend 60-70% on people. Support tickets and NPS scores measure customer satisfaction and predict churn before it happens. Product engagement reveals which features customers actually use, helping you prioritize development resources. Unit economics breaks down real cost vs return per customer segment for optimized marketing spend. === The best founders track both sets religiously. Use your operating metrics to build compelling investor stories, and let investor feedback guide your operational focus. What metrics are you tracking that I missed?

Brand isn’t pipeline. Demand isn’t awareness. Expand isn’t leads. If you’re measuring every part of marketing the same way, you’re doing it wrong. Different jobs. Different metrics. Here’s how we think about each working: BRAND → Get known. Get trusted. Get remembered. 𝘐𝘧 𝘺𝘰𝘶 𝘸𝘢𝘯𝘵 𝘵𝘰 𝘸𝘪𝘯 𝘥𝘦𝘢𝘭𝘴 𝘪𝘯 6 𝘮𝘰𝘯𝘵𝘩𝘴, 𝘺𝘰𝘶 𝘣𝘦𝘵𝘵𝘦𝘳 𝘴𝘩𝘰𝘸 𝘶𝘱 𝘣𝘦𝘧𝘰𝘳𝘦 𝘣𝘶𝘺𝘦𝘳𝘴 𝘢𝘳𝘦 𝘪𝘯-𝘮𝘢𝘳𝘬𝘦𝘵. How you know it’s working: → Branded search volume is trending up → Direct traffic is growing → Organic traffic (especially non-branded) is increasing → Social engagement is rising (from the right audience) → People are finding you through word-of-mouth, dark social, podcasts → You’re mentioned in analyst reports, media, LinkedIn threads → Share of voice is going up vs competitors → Awareness surveys show people actually know who you are Brand takes time. But when done right, it shortens sales cycles, improves win rates, and lowers CAC. Don’t expect performance results from brand overnight. But don’t ignore the early signals either. DEMAND → Capture intent. Drive pipeline. Convert it. 𝘛𝘩𝘪𝘴 𝘪𝘴 𝘵𝘩𝘦 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦 𝘦𝘯𝘨𝘪𝘯𝘦. 𝘈𝘯𝘥 𝘺𝘦𝘴, 𝘵𝘩𝘪𝘴 𝘰𝘯𝘦 𝘣𝘦𝘵𝘵𝘦𝘳 𝘴𝘩𝘰𝘸 𝘳𝘦𝘴𝘶𝘭𝘵𝘴. How you know it’s working: → Qualified pipeline is going up quarter over quarter → You’re converting leads into opps and opps into revenue → Pipeline velocity is healthy (Opps × Deal Size × Win Rate) ÷ Sales Cycle → CAC is efficient, ROI is clear → You’re not just getting emails you’re getting right-fit leads → Funnel conversion rates are strong (Lead → MQL → SQL → Opp → Win) → Target accounts are engaging, not just random leads → Forecasted revenue is predictable from your pipeline Demand is the most scrutinized motion and for good reason. It’s where the dollars get made or lost. EXPAND → Keep customers. Grow accounts. Drive loyalty. 𝘔𝘰𝘴𝘵 𝘵𝘦𝘢𝘮𝘴 𝘧𝘰𝘳𝘨𝘦𝘵 𝘵𝘩𝘪𝘴 𝘰𝘯𝘦 𝘶𝘯𝘵𝘪𝘭 𝘪𝘵’𝘴 𝘵𝘰𝘰 𝘭𝘢𝘵𝘦. How you know it’s working: → Net Revenue Retention (NRR) is above 100% → Customers are upgrading, expanding, or buying new products → Product adoption is increasing (MAU, feature usage, etc.) → You’re seeing fewer churn flags, more referrals → NPS and CSAT are trending up → Advocacy is growing (more case studies, reviews, references) → You’re publishing proof of customer success — not just chasing new logos Retention is where your margins are made. Expansion is where your growth compounds. Ignore this motion and you’ll pay for it later. Marketing isn’t one motion. It’s Brand. Demand. Expand. Know what each one does. Measure it right. And stop using lead volume as your only scoreboard.

Companies and their CEOs obsess over Profitability KPIs. But measuring Profit doesn’t drive Profit. Here’s the problem: Most leaders don't track the right metrics. They don't understand why they matter. They ignore stakeholder perspectives. If you don’t know and act on what the numbers are telling you - you’re not managing profitability. You’re just collecting data. Let’s fix that. Here are 16 Profitability KPIs every CEO and CFO needs to master—and how to extract the insights that drive smarter decisions: ■ Efficiency and Margins 1// Gross Profit Margin Ratio ↳ Why it matters: high margins signal strong pricing power or cost efficiency. 2// Contribution Margin ↳ Why it matters: critical for setting prices, understanding break-even points, and ensuring your products are profitable. 3// Operating Profit Margin Ratio ↳ Why it matters: reveals how well you’re managing core expenses 4// Net Profit Margin Ratio ↳ Why it matters: measures whether your business model scales profitably. 5// Return on Assets (ROA) ↳ Why it matters: shows how effectively your assets generate profit. 6// Return on Equity (ROE) ↳ Why it matters: measures investor return on their investment. 7// Return on Investment (ROI) ↳ Why it matters: helps prioritize high-ROI projects and avoid initiatives with weak returns. 8// Return on Capital Employed (ROCE) ↳ Why it matters: indicator for how well your business uses all available capital to drive profits. ■ Earnings and Market Performance 9// Earnings per Share (EPS) ↳ Why it matters: tells shareholders how much value each share represents. 10// Price-to-Earnings (P/E) Ratio ↳ Why it matters: gauges whether your stock is fairly priced based on earnings. 11// Dividend Yield Ratio ↳ Why it matters: income-focused investors seeking regular returns. 12// Dividend Payout Ratio ↳ Why it matters: balances reinvesting for growth with rewarding shareholders. ■ Cash Flow and Productivity 13// Operating Cash Flow Margin ↳ Why it matters: shows how well you convert revenue into cash. 14// Profit Per Employee ↳ Why it matters: tracks workforce productivity—a crucial metric for scaling efficiently. ■ Advanced Profitability Metrics 15// Economic Value Added (EVA) ↳ Why it matters: measures value above the company's cost of capital. 16// Break-even Revenue ↳ Why it matters: knowing your break-even helps you set realistic sales targets and avoid losses. The takeaway? Stop chasing KPIs for the sake of it. Start using them to lead smarter and grow faster. Want to join the 1% of CEOs who lead with financial intelligence? ▷▷▷ Join me tomorrow for a free webinar for CEOs, VPs, Managers, and leaders and start making 100% better business decisions: https://bit.ly/ceojan18 ▷▷▷ Transform your financial acumen in 6 weeks - live program, spots are limited, starts January 29: https://bit.ly/3ZCI0kr ♻️ Like, Comment, Repost if this was helpful. And follow Oana Labes, MBA, CPA for more

This small shift in our finances helped us scale past $50K/month. We stopped focusing on revenue. And started tracking the right numbers: 1. Gross profit. Because revenue is a vanity metric if your costs are eating all your margins. We focused on delivering our services in the most efficient way possible. 2. Net profit. More revenue without margins is working harder for the same outcome. We got obsessive about efficiency: Cutting unnecessary software costs Negotiating better deals And streamlining operations To increase what we actually add to the bank every month. 3. Churn rate. It’s easy to celebrate new sales. But if customers are leaving just as fast, you're running on a treadmill. We optimized retention before acquisition. 4. LTV. Scaling without understanding customer lifetime value is a dangerous game. Once we figured out exactly how much a client was worth over time, we knew how much we could afford to acquire them. 5. LTV to Acquisition Cost Ratio. The simplest way to tell if your business is scalable. If you're paying more to acquire customers than they’re worth over time, you're in trouble. We optimized this ratio to make sure every dollar spent on growth actually paid off. You usually want to have a ratio of 3:1 of LTV/CAC. These five numbers moved us from "How much did we make this month?" to "How much will this business be worth in three years?" Most founders don’t track these. Don’t make that mistake. Track the right numbers. Make better decisions. Your growth depends on it. What’s the one metric you obsess over in your business? 👇 PS: Fuelfinance has been the best partner to help with our finances.

Most CFOs track 50+ metrics. Only 11 actually matter. I just finished writing a guide for CFOs who are drowning in dashboards but starving for insight. The 11 metrics that separate great companies from the rest: 1. Cash Balance & Runway – Not just how much, but how long Target: 12-24 months. Red flag: <9 months 2. Burn Multiple – Every dollar burned should create >$1 in ARR Excellent: <1. Warning: >2 3. CAC Payback – Speed matters more than cost <12 months = excellent. >18 months = trouble 4. Gross Margin – Your true profitability engine SaaS benchmark: 75-85% 5. Contribution Margin by Product – Know what actually makes money Target: >50% per product line 6. Operating Leverage – Are you scaling or just growing? Positive leverage = real scalability 7. Net Revenue Retention – The compound interest of SaaS Top quartile: 110-120%+ 8. EBITDA Margin – Profitability that matters Growth stage: 10-25% 9. Days Sales Outstanding – Cash velocity indicator Target: 30-60 days 10. Bookings vs Revenue – Reality check on growth Persistent divergence = red flag 11. Forecast Accuracy – Trust builder or breaker Target: ±10% variance Most companies measure everything and understand nothing. These 11 tell you if you're building something durable or just burning cash faster. The best CFOs know: Metrics aren't just numbers. They're stories about your business. Your job is to read them right. And act before it's too late. P.S. Want the full guide with formulas, benchmarks, and red flags for each metric? We just published it with BILL. Get it here: https://lnkd.in/ednjfTPW #BILLPartner