article thumbnail

Why Misunderstanding Startup Metrics Can Cost You Your Business

Both Sides of the Table

There has been a lot of public debate over the past several weeks about whether it’s a good thing to be “gross margin positive” or not and commentary always reminds me that some people at startups don’t quite understand financial metrics or even how to think about which ones are healthy. Customer acquisition cost.

Metrics 150
article thumbnail

What Happens When Startups Turn from Their Innovation Stage to Operational Excellence?

Both Sides of the Table

Nearly every successful tech startup I’ve observed over the past 20 years has gone through a similar growth pattern: Innovate, systematize then scale operations. MakeSpace (as he named it) would help you get your excess goods into low-cost warehouses. How long does it take me to pay back my original customer acquisition costs?

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

How to Wisely Utilize Debt for Business Expansion

The Startup Magazine

By strategically leveraging debt, businesses can access the capital needed to invest in new opportunities, expand operations, and increase profitability. Factors to Consider Before Taking on Debt The debt service coverage ratio (DSCR) is a financial metric lenders use to assess a business’s ability to cover its debt obligations.

Finance 114
article thumbnail

10 Metrics To Drive Your Annual Business Review

Startup Professionals Musings

What I’m talking about here is a level of discipline and skill necessary to collect and analyze the relevant business data, known as metrics. As the end of the year approaches, it’s a good time for every startup to assess the metrics, technology, and platforms they’re using to manage the business. Cost of customer acquisition.

Metrics 252
article thumbnail

10 Ways Owners Often Jeopardize Their Business Growth

Startup Professionals Musings

The problem is that more SKUs dramatically increases complexity and cost, when you can least afford it. Buy too much inventory too soon to get unit costs down. Unit costs are important, but don’t forget about the cash flow hit, extra storage costs, and the probability of obsolete inventory due to necessary updates or pivots.

article thumbnail

5 Keys To A Viable Spending Rate And Cash Management

Startup Professionals Musings

Cash flow is a basic survival metric for every startup. Things will cost more than you expect. Waiting until you have something to sell before bringing on a sales and operations staff. For example, a software development startup raising $250,000 from angel investors better be able to operate on $25,000 per month.

Burn Rate 258
article thumbnail

Small Business Metrics to Track: Measuring Success The Right Way

Duct Tape Marketing

Small Business Metrics to Track: Measuring Success The Right Way written by John Jantsch read more at Duct Tape Marketing Are you tracking the right metrics that truly measure your definition of success? Many entrepreneurs and small business owners operate by gut feel, but that's not a reliable gauge of actual success.

Metrics 55