Metrics are numeric parameters that evaluate the performance of a business and are an important tool to evaluate the progress of the business.  For example, one metric could be sales per customer.  Another could be the conversion rate of leads to sales. Metrics must be easy to understand and need to identify what is critical to the business in the following areas: 

• Sales 
• Gross Profit Margins 
• Employee productivity 
• Advertising effectiveness/Lead generation 
• Overhead 
• Fixed Asset Productivity 
• Interest Coverage

Every business/industry needs to take a unique look at the type of metrics that best evaluate performance.  What may be important for one business may be totally unimportant for another. The start up business owner should work with a Part Time CFO  to help them develop the right metrics.  Once the right metrics are determined it is best to evaluate them weekly by using graphs.  By using graphs you can see if trends are developing and when metrics are trending unfavorably, the business owner should focus on fixing them.  When you have 5 to 7 metrics that you track once per week it allows you to clearly see what needs to be fixed in the business and it allows the business owner to focus on what really needs to be worked on. 

Also, you can’t have too many metrics.  Having 5 to 7 strikes just the right balance as too many metrics will swirl you in too many directions.