Belk On Business

Financial Metrics for the Profit Phase   1. Retention rate and churn – Retention rate - customers that keep using your product or service over an extended period of time and make repeat purchases. Net negative churn - the revenue gained is higher than the revenue lost from churn. A business that can’t replace customers or revenue faster than it loses customers or revenue will eventually become unprofitable  2. Gross profit percentage – the revenues need to be growing at a higher percentage than the cost of producing the product or service  3. Operating profit percentage – Gross profit less operating expenses – if increasing, profit is increasing  4. Owners pay at a reasonable level that supports lifestyle and tax exposure  5. Tax exposure - tax exposure and strategies analyzed quarterly  6. Financing costs – impact of interest and collection costs monitored monthly and reviewed quarterly or annually depending on the type of business  7. Average revenue and profit per custome