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Stage 3: Business Metrics And Goals

Develop business success measures and targets.
Once you launch, you'll be so caught up in running your business that you'll find it hard to think about measuring business success.

Overview

Purpose

Define key business success metrics and targets.

Objectives​

  • Identify measures of business success, or failure.

  • Test your metrics and targets with others.

  • Review your metrics and targets, then either:

    • Continue as they are.

    • Refine them.

    • Find another idea.

  • Set acceptable tolerances for business performance.

  • Implement processes to measure business performance.

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Result

Business metrics that enable you to demonstrate success, or trigger intervention, after you launch your startup business.

Define Business Metrics

Use your business plan to identify critical measures of business success. Look particularly at the Key Metrics, Costs, and Revenue sections of your Lean Canvas. 

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Choose metrics and targets that would demonstrate success or problems with your business design, avoiding detailed, low-level metrics. Use the SMART Goals approach for your metrics (see Weblinks).

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Targets could include:

  • Customers addressed/acquired/retained

  • Revenue/Cost totals

  • Marketing engagement

  • Others, specific to your business

Click button and select Category

"Goals"

Test Business Metrics

Review your metrics and targets. Ask others, such as staff, business partners or supporters to do so too.

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Encourage honest feedback to discover the strengths and weaknesses in your metrics and targets. Ask questions:

  • Are these metrics important to my business?

  • How will they vary as my business develops?

  • Are they specific and linked to a timeframe?

  • Are they realistic and achievable?

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Make sure you record all comments.

Click button and select Category

"Goals"

Review And Adjust Metrics

From the feedback you've received, is there anything you can do to improve your business targets or measures?

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Make changes now to refine your business metrics and targets.

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If changes are major, go back and test your measures and targets again.

Define Acceptable Metrics Tolerances

Your business is unlikely to perform as you predict it will. Performance will vary, and probably won't align with your estimates. Define the point at which this misalignment goes beyond acceptable variation and highlights a problem in your business.

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For each measure, define upper and lower limits. These mark where you'll need to intervene or perhaps adjust your business design because it's either unexpectedly successful, or performing poorly.

Define Tracking Methods

​For each measure, define the method you'll use to capture information and track against your stated targets and tolerances.

 

For example, you could be tracking business cashflow against forecasts on a monthly cycle. This tracking process provides a perfect opportunity to track progress against financial targets.

Are You Ready?

Make a conscious decision about your business metrics and targets. 

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If your metrics and targets haven't been well received by your reviewers, decide whether your business goals are realistic. 

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If you're not likely to be able to achieve your targets, you should ask yourself if your new business can survive with lower performance. ​

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​This is the last time that you'll be asked to decide to quit or commit to the next Framework stage. If you decide to proceed, the next stage is to Acquire Funding needed to ready your business for launch.

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