There are myriad business metrics that can tell you important things about your business and how it's doing. That can be confusing and time-consuming. Fortunately, there are only a handful that you need to measure weekly.
Business metrics provide you with key information about your company's performance. Identifying the right business metrics to track, and successfully following and acting upon those metrics, is essential to the health and wealth of your company.
Determining the frequency for measuring metrics is critical. While some can be measured more sporadically, there are three that your company should measure every single week, without fail.
Sales performance: The first line you should look at is sales performance. Specifically, look at sales performance for quality sales (non-discount or low margin), credit-worthy customers, and pipeline sustainability. Additionally, look at sales performance “period over period.” The periods you should compare will differ depending upon your goals and objectives. Determine what is right for you.
Cash: Cash is king. Look at how your cash is generated, how it is consumed, and whether you have enough. It is important to make sure that your managers know how to follow the dollar when it comes into your company.
Return on invested capital: ROIC is a great measure for understanding how well you use the money you have to make more money.
By measuring these items, you can stay on top of the trends in your business and foster its growth. In the end, investing a little bit of time watching sales, cash, and ROIC will bring in big returns.