There is no point setting goals if you are not measuring them. If you read start-up literature or blogs, it becomes clear that successful companies measure meticulously and use the metrics in everything. [related: which metrics to use for measuring start-up performance]
But most of the metrics tend to be boring. So, today, I want to introduce 2 new metrics that can pep-up your measurement process. Of course, you should continue to measure your business by traditional metrics as well.
Metric #1: Million $ Days:
Many start-ups want to reach million dollars in an year revenue level. It is a highly sought after goal. But million dollars sounds like a lot of money for a small business.
But when you break it down, a million dollar in an year becomes per day sales of $2,857 (1,000,000 divided by 350, assuming 15 holidays in an year).
If your average product price is $50, that is roughly 57 sales per day. Not so much frightening any more.
Now, I would call any day a million $ day if you make more than $2857 in sales on that day.
I am glad to inform that in 2011, I have had two million $ days so far. Both of which in the 2nd week of Jan when I re-launched my Excel School program.
Metric #2: Goal Days:
This is very simple if you understand the Million $ days concept. We just take your annual revenue target and multiply it by 1.5 and then divide that with 350 (ie we find how much you should make per day to exceed your annual revenue goal by 50%).
And then we call any day a goal day if the sales for that day are more than the above number.
As noted in my 2011 goals post, my revenue target for this year is $200,000. That means, I my goal day value is =1.5*(200000/350) = $857.
Now, in 2011, I had 21 days so far (until Mar 17th).
What metrics do you use to track your performance?
While I prefer to sit back and do things at a slow, relaxing pace, I think setting a few goals and keeping track of the progress can take you a long way in life.
I want to know how you track your start-up performance? What metrics do you use? Please share using comments.