The 5 Numbers That Can Make or Break Your Growth

Every founder knows their revenue.

But very few know what’s actually driving their growth or eating at their profit.

Most founders track revenue. Fewer track what really matters.

And that’s why so many run into cash flow issues, profitability plateaus, or unscalable growth.

That’s where financial metrics come in. Not the fancy ones. Just the core few that separate companies that grow profitably from the ones that scale into a black hole.

In this weeks newsletter, we’ll walk through the 5 essential metrics every business owner should be tracking. I’ll break down what they are, why they matter, and how to start using them to make smarter decisions.

Because running a business isn’t just about building, marketing, and selling.

It’s about understanding the story your numbers are telling, because that story determines whether your business survives, thrives, or dies.

1. Cash Flow: The Lifeblood of Your Business

What it is:
Cash flow tracks how much money is moving in and out of your business, especially through operations. You can be profitable on paper and still not have enough money to make payroll. That’s why cash flow is king.

Why it matters:
Without sufficient cash on hand, your business can’t function, even temporarily. Cash flow helps you manage timing, not just totals.

According to a study conducted by Jessie Hagen, who was previously with U.S. Bank, 82% of small business failures were linked to poor cash flow management or a poor understanding of cash flow.

Example:
Let’s say your SaaS business brings in $30,000 in monthly revenue. You just closed a $60,000 annual deal, but the client pays net-60. In the meantime, your $25,000/month in payroll and ad spend keep rolling.

Even though you’re technically profitable, poor cash flow puts you at risk of overdraft or missed payroll.

Insight: Revenue doesn’t pay the bills. Cash does.

2. Gross Profit Margin: How Efficient Are You?

What it is:
Gross profit margin = (Revenue – COGS) ÷ Revenue
This shows how much of every dollar you keep after direct costs, like materials, fulfillment, or contractor labor.

Why it matters:
High margins signal pricing power and efficient delivery. Low margins mean you're working hard but not getting paid enough for it.

Example:
You run a DTC skincare brand that generates $100,000 in monthly sales. Your cost of goods sold (product, packaging, shipping) is $45,000. Your gross profit margin is 55%, or $55,000.

Not bad, but if your COGS creeps up to $60K, you’re suddenly down to 40%… with less room for marketing, ops, or profit.

Insight: A margin drop might not feel urgent, but over 12 months, it could cost you hundreds of thousands.

3. Operating Expenses: Plug the Financial Leaks

What it is:
OpEx includes rent, payroll, software, insurance, subscriptions, etc. It’s everything you spend to run your business (outside of direct production).

Why it matters:
High fixed expenses eat into your profit. Founders often overspend when revenue’s rising, and don’t notice until it’s too late.

Example:
Your creative agency generates $40,000/month in revenue. You’re spending:

• $10,000 on contractors

• $5,000 on office rent

• $3,000 on tools

• $6,000 on ads

• $2,000 on miscellaneous expenses

That’s $26,000/month in OpEx, leaving $14,000 gross. But you’ve got a 2-month cash cushion.

Then a key client pauses work. Now you're down to $20K/month. With fixed OpEx unchanged, you're burning fast.

Insight: Scaling headcount or tools too fast can turn short-term wins into long-term liabilities.

4. Net Profit Margin: Your True Bottom Line

What it is:
Net profit margin = (Net Income ÷ Revenue) × 100
This is what you keep after everything: COGS, OpEx, taxes, interest, etc. It's the ultimate measure of profitability.

Why it matters:
This tells you how much of your revenue turns into actual profit you can use to grow, pay yourself, or reinvest.

Example:
A consulting firm with $50,000/month in revenue has $35,000 in total expenses (COGS + OpEx).
That leaves $15,000 in net income, which equates to a 30% net profit margin.

Compare that to an e-comm brand with the same revenue but $45,000 in total expense leaving only $5,000 left (10% margin).

Which one scales better? The one with room to breathe.

Insight: Revenue without healthy net margin = busy work. Net profit gives you leverage.

5. Customer Acquisition Cost (CAC): Growth That Pays

What it is:
CAC = Sales + Marketing Spend ÷ New Customers Acquired
It shows how much you spend to land one paying customer.

Why it matters:
If your CAC is too high relative to LTV, you're growing unprofitably and burning cash instead of building wealth.

Example:
You run a coaching business and spent $6,000 last month on paid ads and a part-time marketing assistant. You brought in 15 new clients. Your CAC is $400 ($6k/15).

If your average client stays for 3 months at $300/month, their LTV is $900.
Not bad. But what if churn increases and clients only stay 1.5 months? LTV drops to $450 and your margin vanishes.

Insight: CAC is a moving target. Track it monthly and compare to LTV to keep growth in check.

When Metrics Become Your Map

When you know your numbers, you make better decisions.

You spot problems early. You double down on what works.
And you stop second guessing every move.

Here’s what I’ve seen firsthand:

• Founders who track these 5 metrics are more confident in their decisions

• They scale more sustainably

• They recover faster from setbacks

If you’re building a business and not tracking these?
You’re flying without a map.

Want help translating your numbers into strategy?

I work with founders to bring clarity, confidence, and control to their financials.
If you're not sure where to start, start with a message.

Shoot me an email or reply to this newsletter if you want to talk through your metrics and goals.