While working with their accountant and considering cash flow forecasting, business owners tend to look at what many would say would be their most important metrics: revenue, profit and loss. These measurements are certainly important, but there are often figures that go overlooked by business owners and their accountants. Inc. Magazine provided a list of metrics businesses owners should start paying attention to if they want to see their long-term financial goals come to fruition.

Revenue percentages 

Businesses generally obtain most of their revenue from the products and services they offer. That's a given. What many business owners may not realize, is that not all revenue breaks down the same way. Some business leaders lump the revenue from all of their sales into a single row in their budget – this is a mistake. What they should do instead is understand revenue percentages; that is, what percentage of the total revenue pie does each product or service account for. Highlighting and understanding this concept, will give business owners more insight into which products or services are money makers and which are drains. With this information, they can develop a strategic plan that focuses on what works and reducing what doesn't. By analyzing revenue percentages businesses can also forecast their sales and peek into some potential trends that may be forming in the industry.

What it takes to gain customers

Bringing in new customers and maintaining existing relationships are fundamental to growing a business. But companies that want to build a realistic strategic plan will need to know how much it costs to attract and sustain customers. This is known as the customer acquisition cost (CAC), which can be measured by a fairly simple equation. First, business owners must add up the costs of marketing and sales, as well as salaries and, then they must divide that number by the amount of customers who have been brought in over that same duration of time. Obviously, it is best to have a low CAC. However, there is not a benchmark number for CAC. Businesses that have a higher lifetime value (LTV) of a customer may have higher CACs.

Value of a customer

While it may be a tricky metric to record and measure, businesses can improve their plans by understanding the LTV of their customer base. Lifetime value of a customer is the net value of revenue earned through a relationship with a customer. The figure will grow as a customer continues to purchase products or services from a business. The math behind LTV can be a bit complicated, so here's the idea in simple terms: the higher the LTV, the more a company will spend to acquire and maintain customers. Factoring LTV into a strategic plan can help businesses get a more realistic idea of the source of their revenue and areas that need to be more heavily resourced.

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