The Most Important Metrics To Monitor In Your Business

Reading Time – 5 minutes

“What you pay attention to, improves.”

I learned that from one of my mentors, Brian Tracy. If all you do, for example, is just start weighing yourself once a day, every day, then guess what? Statistically speaking, you’ll start to lose weight, even if you don’t consciously do anything different.

Why? Because the fact you’re paying attention to your weight and seeing a number there you don’t like every damn day will at least subconsciously compel you to make changes to improve that number.

I honestly think that’s why so many Westerners get fat, especially women. They stop weighing themselves for various reasons, and then one day, years later, they step on the scale and have a panic attack at how much weight they’ve gained.

Business metrics work the same way. If you consistently pay attention to certain KPIs (key performance indicators), they will likely improve, at least a little. At best they won’t get worse because you’ll be watching them.

Here are a few of the key metrics you should use in terms of your time usage:

  • Number of hours per week you work on your business (and no, thinking about your business doesn’t count as work; lots of people seem to think this)
  • Number of IW hours per week you do (IW means Improvement Work, that kind of work that improves your income, like engaging in new marketing or creating new products)
  • Number of hours you spend interacting with your customers, clients, or audience
  • Number of hours you spend in “bullshit work” like checking your email, doing paperwork, or working on technical crap

Here are a few key metrics you need to pay attention to on the financial side of your business:

  • Revenue (gross income) per month, quarter, and year
  • Profit per month, quarter, and year
  • Gross profit per month
  • Monthly cash flow (which is different than profit!); cash in versus cash out in a calendar month
  • Profit margin on every item you sell, both as a percentage and in real dollars
  • Customer acquisition cost (CAC); how much it costs you in total advertising and sales commissions to get the average new customer
  • Lifetime customer value (LTV or CLV); how much the average customer pays you over their lifetime
  • ROI (on anything that costs you money, from team members to marketing campaigns)

Here are a few metrics you should pay attention to in terms of your business growth:

  • Number of new products or services you introduce to the marketplace per year
  • Growth in revenue and profit, over a period of months
  • Frequency and amounts of raising your prices (very important for coaches and consultants)
  • Amount of time spent improving the effectiveness and profit of your existing products or services
  • Amount of time spent planning for the future and anticipating future trends, changes, and problems

Of course, these aren’t all the metrics you should pay attention to, and different types of companies should pay attention to different things. However, paying attention to the above metrics will make it much easier to make more money, grow your business, and sustain your business for the long term.

I can tell you for a fact that the vast majority of business owners only pay attention to two or three of the above items in the list, usually things like monthly revenue and profit. With competition like that, you’re bound to win if you’re paying attention to all of the things they aren’t.

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Question of The Week

How To Be A Successful Gen Z’er In A Collapsing World

J. N. writes –

I keep hearing about how the millennial and gen z generation is screwed. Like about how college is too expensive and how there won’t be as many jobs available because people aren’t retiring and higher taxes and all that stuff. And women in their 20s making more money than men. And AI taking our jobs soon and how rents are increasing and we won’t be able to live anywhere.

What’s your advice for young guys who are now entering the workforce? I’m trying to stay positive about this but its hard. With all of your knowledge and experience if you were me what EXACTLY would YOU do if you were 20 years old right now to build a life with all of these problems???

Yes, Millennials and Gen Z are in big trouble and you also have tremendous advantages my generation (Gen X) didn’t have and only fantasized about having. Both of these things can be true at the same time.

So here’s exactly what I would do if I was just starting out today in 2024 as a young man, acknowledging both of those above realities:

1. I would not even THINK about going to college. Unless you’re going to be a doctor (and c’mon, you don’t want to be a doctor) that’s going to make all of these problems worse. Yes, even if you want to go into a STEM field (for fuck’s sake, STEM is the first thing you outsource!), and even if you live in Europe and it’s free, going to college is a destructive act in the modern era on multiple levels. Don’t do it.

And if my mom/dad/grandma/whoever didn’t like that, I would tell them to fuck off. (FYI this is exactly what happened to me when I didn’t go to college and exactly what I did. When it comes to standing up to your parents, be a man and have some balls.)

2. I would keep my monthly living expenses microscopely low. I would almost live like a bum. I would not own a car. I would not have any debt. I would live on beans and rice. I would not travel. If I could move to a less expensive country I would immediately do that (as long as I had good internet). I would live in a small apartment with roommates (but not live at home with mommy and daddy); I can always go work with my laptop at a coffee shop or library during the day and just sleep at my apartment.

3. If I could (and maybe I couldn’t) I would get an entry-level sales or marketing job at a big corporation and learn sales/marketing on the job. These are the fastest, most monetizable skills. I would try my best to get a job like that, but if I couldn’t, I would do internet gigs just enough to support my lifestyle, which wouldn’t be much.

4. I would put my head down and work 10-11 hours daily, 5-6 days a week. During the day I’d work my sales/marketing corporate job or my internet gigs. During the evenings/weekends, I would build my Alpha 2.0 location-independent business as hard and as fast as I possibly could, getting my income to $7,000 per month as soon as humanly possible, and quitting my job/gigs as soon as I could so I could focus more time on growing my business.

5. Of course I would take a little time off in the week to do things like relax, work out, have sex, and be a human. But then I’d be right back at it.

6. I would not increase my lifestyle during this time, instead stack cash. First, it would be cash in a savings account, but then I would branch out to precious metals (especially gold and silver) crypto (especially bitcoin), and a few other things, eventually going into real estate (maybe, depending on where I lived). I would 100% focus on building assets rather than trying to live like Andrew Tate.

That’s what I would do if I was Gen Z kid right now. And it would work.

(By the way, interestingly, I’m doing a modified version of the above right now, and I’m a 52-year-old high-income earner. I see the storm coming too. As usual, I advise what I’m actually doing or recently did.)

So get to work.

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1 Comment
  • Simon
    Posted at 08:38 pm, 7th May 2024

    Great response what you would do if you’re 20.

    It’s what I’ve ended up doing; getting into remote sales. After trying to get a business off the ground after 3 years. I learned the hard way you need to get steady income sorted first.

    If the original person reads this, get into trying to find work as an appointment setter. Then get used to putting in the work, that might take a bit of time if you’re a LISG.

    If you pick a cheap country and a second tier city, sharing an apartment, you could easily live off $400 per month.

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