Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

Metrics for Revenue Streams

Every company has metrics that track performance. The key question is whether these metrics really provide visibility to performance as viewed by the customer.” Steve Matthesen

Working at a startup, there are always a host of things which need to get done. It is a constant battle with time to stay on track and achieve goals and targets. In the midst of this daily commotion, we are inundated with information from all sides. To keep abreast of all these developments, it is essential to develop a system which provides dashboard views about current standings. This is where metrics come into play. They need to be incorporated into every major business function to provide real-time statistics and keep the focus in the right direction.

The metrics for revenue streams used at some of the organizations that I work with, range from being very simple to relatively complex depending on the nature of the business. I have experienced that there are a few metrics which need more focus than others where revenue is concerned. They are:

1. Revenue Stream Growth: This metric provides data regarding development of each stream of revenue by quarter. It involves data which includes percentage growth numbers, pipeline activity and deal closures. These figures provide detail analysis on streams that are growing at a faster pace than others, the stages of revenue facing plateaus and how projected business is forecast in the coming quarters for each stream. 

2. ROI on Revenue Streams: It is one thing to have an extremely high turnover and a completely different story when that is not being converted into bottom line results. This metric provides data regarding the profitability of each segment and a break-down of investment into the stream, as well as marketing costs and cost of goods/services. Constant vigilance helps regarding which streams need to be promoted and which need to be ceased. 

3. Market Share & Industry Analytics: This metric keeps track of current growth trends in the industry the organization operates in. It constantly updates data regarding major changes on competition, government policies, economics climate and company position. This requires constant study to stay current with the rapid changes taking place. 

While keeping all the metrics in mind make sure that you take time out to compare them with related metrics to customers, vendors, suppliers and distributors. This will ensure a complete picture of the current situation. At an early stage startup, complicated metrics are not necessary, what is required however, is the ability to put these metrics into practice at basic levels. This will ensure that the position and development of the company is dealt with more effectively.

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