By Tiina Wilen
CEO MATH – the numbers you need to know if you are going to grow and scale your business
What's in this article
Looking to grow and scale your business? Great, I’m sure you have lots of plans for your future! However, growing a business requires far more than a big vision. One thing that every business owner needs to master is the numbers that will reveal whether you can grow or not, and how that would look like for you.
What numbers do I need to know when growing and scaling my business?
It depends a great deal on your business, but the ones that are common for every business are these:
- your client acquisition cost
- the cost of delivering your product/service
- the prospected revenue per client over time
Client acquisition cost
This is simply the cost you pay to get a sale. How you calculate this depends on your sales methodology – it could be the investment in trade fairs or advertising or the investment in organic client acquisition through digital platforms. The key to remember is this:
Making money always costs money. If you use TIME to make money, you still invest money, because as a business owner, your time = money. Every moment you use money to make money, you want to know how much you invest and how much you gain.
Cost of Goods / Services Sold
What does it cost your company to deliver the service or product? This is where we need to calculate every cost item that goes into the delivery: time, materials, logistics, packaging, office space, people… what does it cost you to deliver one piece of your product/service?
The revenue per client over time
How much money one client is worth? If you have built your business model right, you can expect one client to bring far more revenue than the first transaction. This means that you can invest more in your client acquisition knowing that, over time, it will become a profitable transaction.
Would you like to learn how to calculate your growth numbers? Download the SIMPLE CEO MATH example and plan your growth like a CEO!
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