How to Establish a Baseline for Business Growth

If you can measure your business activities and results properly, you can quantify your growth.

By measuring your business activities and results properly. you can quantify your business growth.

Each of the following should be available to you for each month of the previous year as well as the total for last year:

Revenue in dollars

–          These numbers should be in your monthly income statement. If you don’t know them, ask your bookkeeper or accountant to help you assemble them.  If your goal is to do more business this January than last January, you need to know how much business was done last January as a baseline.

Number of transactions

–          Your bookkeeper or your bookkeeping software should be able to tell you this number.  If your invoices are in numerical order, you can subtract the last invoice number of the month from the first invoice of the month. For example,  if your last invoice was 3,657 and the first invoice was 3,343, you did 314 transactions that month (3,657 – 3,343).

Average transaction value

–          If you know your total revenue for the month and the total transactions per month from above, you now can divide the total revenue by the number of transactions to get the average transaction value. For example, if you did $25,000 in total revenue dollars and 100 transactions, your average transaction value is $250.00.

Number of customers

–          How many unique customers did you do business with last year?

Number of new customers

–          How many new customers did you get last year?

Number of customers who left

–          How many customers stopped doing business with you last year?

Number of times each customer transacted with your business last year

–          Assuming you have customers that make more than one transaction in a year, how many times did they buy?

Average number of transactions

–          If you know how many customers you have and how many transactions you did, you can also divide the number of transactions by the number of customers to get the average.

If you can calculate all the above numbers, that’s awesome. If you can’t, I highly recommend you find a way to measure the above for the current year.


With the above analytics in front of you, you can now measure how you manage your business’s growth.

Focus here:

1)     Increase the number of new customers

2)     Reduce the number of customers who left

3)     Increase the average transaction value with up-sells or price increases

4)     Increase the number of times your existing customers do business transactions with you

The special bonus you will receive for all your work in calculating these numbers is that just by putting the focus on these metrics, you and your team will see them go up!

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