4 Metrics for Measuring Company Growth
Company growth can be measured in a number of ways, and your method is likely based on the goals you’ve set for your business.
However, if you fall into the same category as most business leaders, your goals are probably heavily focused on revenue growth.
To ensure you’re hitting those revenue growth goals, you need to make sure you are tracking metrics that give you insight into how your business is growing.
Here are a few metrics your can track to get a better understanding of your company’s growth:
1. COMPANY GROWTH MEASURE
Revenue growth is a comparison metric and is usually looked at as a rate. It looks at your revenue through sales in a given time period and compares it to your revenue through sales for a previous time period.
Oftentimes, companies will look at revenue growth overtime periods of:
- Month to month
- Quarter to quarter
- Year to year
- Current month to same month last year
This helps you see how much your business has grown in terms of revenue from one point of time to the next.
You can calculate this by dividing your revenue this period by your revenue from a previous period.
2. COMPANY GROWTH MEASURE
Revenue Per FTE or Hours
Revenue per FTE (full-time employee) shows you exactly how much revenue each of your employees generates.
When you compare your current revenue per FTE to revenue per FTE from a previous period, you can see if you’ve taken a step backward or grown. While this metric is great for internal comparison, comparing it to other companies in your industry will show you if you are getting high or low productivity levels from your employees. This can also be a measurement stick to see if you are over (under) staffed.
You can find revenue per employee by taking your company’s total revenue and dividing it by the number of employees within your company.
3. COMPANY GROWTH MEASURE
Revenue Per Customer
As the name implies, revenue per customer is the average amount of revenue each of your customers generates. The higher your numbers in this metric, the better, as long as you don’t have significant customer concentrations. A higher number indicates your customers are willing to spend their hard-earned money on your products and services.
To measure this growth metric, compare it to a previous time frame, if it’s a higher number, consider it a win. If it’s a lower number it’s time to make some adjustments.
Calculate this metric by dividing your total revenue by your number of customers.
4. COMPANY GROWTH MEASURE
Return on Investment (ROI)
It’s no surprise ROI (return on investment) is used to measure growth. The higher your ROI the better because it means you are making high revenues on the money you are putting into your business. You should constantly be working towards a higher ROI.
You can calculate your ROI by dividing your net return by the cost of your investment. To turn this number into a percentage, multiply it by 100.
Ready to Grow Your Company?
By tracking and regularly checking in on these metrics, you’ll be able to measure your company’s growth more accurately and efficiently.
However, simply tracking and measuring is just the tip of the iceberg. Once you have your numbers, you’ll want to make whatever adjustments you can to improve them. This is where working with an experienced accounting partner will benefit you.
At U-Nique, we work with your finances to ensure your numbers are always trending towards growth, so you can focus on what really matters, running your business.
Learn more about our services by visiting here.