KACHARAGADLA

Gross profit. Sales revenue. Cash on hand. All of these are important metrics, but they may not be the most important metrics for your business. When I start working with a new client, I always ask which metrics they track on a frequent basis. I’m often surprised that most people only track a handful, such as revenue (not profit), new customers and sales leads in their pipeline. When I inquire as to why they track those specific metrics, most people simply say, “That’s what I was told to track.” Not surprisingly, these folks often have a big problem in their businesses because they haven’t identified the metrics that really matter -- the ones that strongly correlate to success. While there’s nothing that makes one metric better or worse than any other, it’s important to keep in mind that the most important metrics in your business will change over time, depending on the company’s stage of development and market conditions. For example, if business is booming and you’re land