The Top 3 Metrics Every Business Owner Should Track Monthly

Running a business is both an art and a science. While passion, vision, and leadership are vital, it’s the numbers that tell you whether your efforts are truly working. This short guide will walk you through the three most important metrics every business owner should track monthly. These aren’t just numbers—they’re your compass in an ever-changing market.

Why Monthly Metrics Matter

Monthly tracking provides a balance between real-time responsiveness and longer-term planning. Weekly data may be too volatile to make smart decisions, while quarterly or annual reviews might be too slow. With monthly reviews, you can pivot quickly, optimise operations, and avoid nasty surprises.

Metric #1: Cash Flow

What It Is:
Cash flow is the movement of money in and out of your business. It shows how much cash you actually have on hand—not just what you’re invoicing.

Why It Matters:
A business can be profitable on paper but still go bankrupt if it runs out of cash. Monitoring monthly cash flow helps ensure you can pay suppliers, staff, and other obligations on time.

How to Track It:

• Use cloud accounting software like Xero or QuickBooks.
• Create a cash flow statement monthly.
• Separate income, operating expenses, loan payments, and capital expenses.

Pro Tip: Aim for positive cash flow each month. If it’s negative, dig into the causes immediately.

Metric #2: Customer Acquisition Cost (CAC)

What It Is:
CAC measures how much it costs you to gain one new customer. It includes all sales and marketing expenses divided by the number of new customers acquired in a given month.

Formula:
CAC = Total Sales & Marketing Spend / Number of New Customers Acquired

Why It Matters:
If your CAC is too high, your business model may not be sustainable—especially if your customers don’t stick around for long.

How to Track It:

• Keep records of all advertising and marketing spend.
• Record the number of new customers each month.
• Calculate monthly and track trends over time.

Pro Tip: Compare CAC with your Customer Lifetime Value (CLTV) to ensure long-term profitability.

Metric #3: Monthly Recurring Revenue (MRR) or Sales Growth

What It Is:
For subscription-based businesses, MRR is the predictable revenue earned each month. For others, monthly sales growth offers a similar picture of financial health.

Why It Matters:
It’s a direct indicator of your business’s growth and revenue predictability. Trends here can alert you early to issues or signal when it’s time to scale up.

How to Track It:

• For MRR: Sum all recurring revenues (e.g., subscriptions).
• For general sales: Compare total sales this month vs last month.

Pro Tip: Track both gross and net MRR to understand churn impact.

Bonus Tips for Staying on Track

• Automate Reports: Use dashboards to keep metrics visible and current.
• Set Goals: Use SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals tied to each metric.
• Review Monthly: Schedule a monthly financial review meeting—even if you’re a solo founder.
• Adjust Quickly: Use the data to make quick, informed decisions. Waiting too long can be costly.

In the end, what gets measured gets managed. These three metrics—Cash Flow, Customer Acquisition Cost, and Monthly Revenue—provide a solid foundation for navigating business decisions with clarity. Tracking them monthly isn’t just smart; it’s essential. Stay consistent, stay curious, and let your data guide your direction.