My advice to any business, but especially a startup, is to know your numbers.
When I say numbers, I don’t just mean your profit and loss.
At Redwigwam we specialise in providing fully managed, trained and flexible staff for various sectors and I look at hundreds of KPIs.
It’s easy to get swamped by data so we use a model called ‘data hierarchy’. I can see the top line and if there’s a number that stands out, my team can drill down and find out why.
One of key metrics I look for is ‘cost per acquisition’. In business it’s easy to be a busy fool so it’s really important you know how much it costs to acquire a customer.
During the pandemic there’s a shortage of flexible workers and we won’t put a job on our platform unless it’s paying a minimum salary of £10 an hour.
We won’t take work that pays the minimum wage of £8.91 because, by studying the numbers, we know we won’t be able to fill those roles and we want to drive up standards.
Other key numbers I look at as CEO are: cashflow; CPA (cost of acquisition for workers and hirers); percentage of jobs filled; average time to fill jobs; and net promoter score (NPS).
I also spend a lot of time on gross margin, ensuring the correct mix of work on our platform.
Redwigwam’s portal has its own dashboard where we record everything from the percentage of jobs fulfilled, time taken to fill, number of workers, average hourly rates etc.
We also use software such as HubSpot and AskNicely where we measure who we talk to and what our customers think about us.
We also operate a competency-based people management system – e4enable – and I regularly review this to check how the individuals in my team are performing and what I need to do to improve our joint performance.
As a control freak I am lucky in that I can see the majority of our KPIs on a live dashboard all the time.
Businesses that are reactive to the market and their numbers are more likely to succeed but it is important that you don’t keep changing direction or sending mixed messages to your team. Your numbers must show you the whole picture to make considered change.
Startups fail for a variety of reasons. They’re always based on a good idea and it’s important that the good idea either solves a problem that customers need solving or it is something that customers want to buy.
Understanding your company’s purpose is essential to success.
Finally, always keep an eye on cashflow. If you don’t have sufficient cash, you don’t have a business.