Belk On Business

Financial Metrics for the Growth Phase   The growth phase is the second phase or stage of business’s life cycle.  Sometimes called the perseverance or survival stage.  The main problem a business in this stage faces is understanding the relationship between revenue, expenses, and cash flow.  The entity usually has enough revenue to match expenses but struggles with enough cash flow consistently to cover debt obligations and finance growth.  Returns on time and capital are marginal and the owner is still filling many seats in the business. The primary KPIs a company in this phase needs to monitor are KPIs that drive growth – how are we reaching prospective customers and how are we monetizing them? From a financial perspective, some of the most metrics a company in this phase should be monitoring:   1. CLV:CAC – lifetime value of the customer to customer acquisition cost ratio.  Generally, this ratio, in many industries, needs to be 3:1 for sustainability.  Determine what