10 Startup Metrics Every SaaS Founder Should Get In Touch With

Being an entrepreneur is not an easy job. Mere getting an idea is not enough to establish a start-up. One should strive to create a sustainable business. For this, one must raise enough money, evaluate the market and think about growth and profitability apart from keeping your personal growth in mind.

Here, we help you with some startup metrics which will be useful to keep a keen eye on your business and tracking your journey as an entrepreneurship.

1) Gross Profit (GP)

Gross Profit is the difference between the total revenue and the costs of goods one sells. In simple words, gross profit is the profit which one company makes after deducting the costs related to the making as well as selling the product.

2) Customer Acquisition Cost

The growth of a startup mainly depends on the customer acquisition and obviously, there is a significant cost associated with it. If the CAC is not improving in due course of time, you need to make few gimmicks to decrease the cost and increase your customer numbers.

3) Lifetime Value (LV)

This is the total amount you expect from a single customer throughout the time they are associated with your business. For a successful business, one must ensure that their Customer Acquisition Cost (CAC) is always less than the LV. If in case CAC is more than LV, then it’s time to grow your capital amount for your business to run.

4) Billings

It is the sum of current quarter value and the sum of deferred revenue from the previous quarter.

5) Compounded Monthly Growth Rate (CMGR)

In simple terms, this is the return of the invested money over a certain period of time. Three measures are taken into account to calculate the CMGR. Investment’s beginning value, ending value and the time period. It can be calculated by the use of this simple formula.
CMGR = {(Ending Value/Beginning Value) x Number of Months} – 1

6) Gross Churn Rate

This measures the monthly recurring value that you lose in a month when your customers or subscribers discontinue your service in the middle of the time period.

7) Organic Traffic

This is the traffic that comes to your website as a result of unpaid search results. A better SEO increases the organic search of a website. As a founder, you should ensure your website has a better SEO by setting practical goals and sharp content strategy.

8) Sell Through Rate (STR)

Sell Through Rate is calculated with a simple formula.
STR = Number of units sold in a period/ Number of items at the beginning of the period.
The time period is usually taken as one month.

9) Gross Burn

This is a measure of all cash outlays and monthly expenses which a startup needed. If you are lacking sufficient capital to set a startup, this factor is what you should be concerned about.

10) Month-On-Month Growth

This is the measure of the monthly growth rate of your startup. However, investors will be interested to see your compounded month-on-month growth as it helps to track the periodic growth of your startup business.