The 3 Most Important Metrics For A Successful Business
Ignore everything else
There are only a few aspects of business that are truly important.
Almost everything in business will work itself out if you follow the process and stay focused on what matters.
In today’s issue, I will break down the three most important aspects to pay attention to if you want to succeed in business.
LFG. 🔥
1. Cash Flow
Nothing matters more than cash flow. It is the oxygen of your company. Without it, the business suffocates.
This is why I always advocate starting with a service business or an agency. One agency customer can generate as much free monthly cash flow as 500 sales of a digital product.
Cash flow gives you freedom. It allows you to invest in yourself, make adjustments, breathe easier, and most importantly, build your machine.
That’s why I spend so much time in The Launchpad teaching sales. If you can’t generate new business, you can’t generate cash flow.
So if you want to build a business, either learn sales or bring in a partner who already has the skill set.
Cash is king. It always will be.
But cash alone isn’t enough. What really determines your long-term success is how much value each customer brings to your business.
2. Lifetime Value (LTV)
Lifetime value is one of the most important metrics you can track.
It shows you how much profit you make per customer, breaking your P&L into quantifiable units. It also tells you how satisfied your customers are with your service or product.
Most people see LTV as a financial metric, and it is. But more importantly, it measures customer happiness.
I remind myself daily of a Warren Buffet quote that has shaped how I see this.
“The most important thing in business is to delight your customers. I’ve never seen a business fail that had millions of delighted customers.”
And as always, Warren is right.
Your marketing, sales, scalability, content, and all the bells and whistles mean nothing if your customers aren’t happy. If they feel they aren’t being treated well, they will leave.
LTV is your real-time feedback loop on how well you are serving your customers.
But there’s one last metric for us to measure. Even with strong cash flow and loyal customers, your business can still collapse if your expenses spiral out of control.
3. Expenses
Unnecessary expenses kill more businesses than anything else.
As high achievers, we want the best tools, the best setups, the best resources. But expenses are an anchor. They weigh you down, especially in the early stages.
My business coach gave me advice I never forgot: “Resourcefulness is more important than resources.”
Money will not solve all your problems. In most cases, your ability to think, brainstorm, and problem solve is far more valuable.
Here are a few examples from my own journey.
I still don’t have a studio. I would love one, but instead I learned Riverside, bought a quality mic, a mixer, and recording equipment. My videos are professional, but more importantly, they are branded to me.
I still do sales outreach manually. It would be easy to buy software, load up a list, and spam strangers. But that’s a waste of money. Instead, my sales team and I personalize our efforts and get better results the old-fashioned way.
I don’t travel for business. Why would I? I can have every meeting I need from my office. I save tens of thousands of dollars a year, and I stay on track with my diet, workouts, and routine.
The mistake most people make is thinking they need to spend money to be taken seriously.
You don’t. If you are good at what you do, people don’t care what you wear, where you live, or what you believe in. The value you bring to the marketplace is much more important than how you present yourself.
Save your money and reinvest it into your future. You can buy watches, clothes, and office furniture when you’re rich. By then, you’ll realize success was never about those things. It was always about the freedom.
Love you guys. Talk to you tomorrow.
Tim
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