Lean Canvas Model Section 8- Key Metrics
The eighth section of the Lean Canvas Model is called Key Metrics, meaning these are the key to what makes your business successful to you.
It is important to note that these Key Metrics will be different for every single business and will most likely change over time.
Key metrics can involve a lot of different elements. Key metrics are your personal goals for your business. How you will know you are succeeding. Below, I will give some examples of key metrics along with some clarifying points.
Most businesses have something involving profits as their key metrics. Making a profit has several elements that impact it that are helpful to understand.
Beginning a food service business, or any business for a location for that matter, costs a great deal of money. This typically takes a large investment either from a investor partner, your own savings, or a loan from a bank. Because of this initial investment and/or loan payments, it may be a great deal of time before your profits outweigh your expenses. This means that many small businesses are not profitable for months, or even years. There are many small business owners that are not able to pay themselves for quite a while because of paying expenses and employees.
Because of this, your key metrics in the beginning may be to reach profitability by a certain date or to be able to pay yourself by a certain date. These are awesome goals to have. Just note that within any business, there are many things out of your control. An event like COVID-19 can set a small business back drastically, so know that all goals in a business may not be achievable if circumstances change.
Many businesses are home based businesses. My business is. I have made a firm decision to never open a location because it is extremely costly and would require a great deal of work and commitment. Since my business is what’s called a “side hustle” I limit my investments so that I never spend more than I make. When I buy a new piece of equipment or products, I make sure that I am either able to pay it off quickly with no interest or have a large order in place that will pay for it. Since I am a home based business, my key metrics look very different from a business with a location. My key metrics for my business is to fund travel. We use the money from my business to pay for trips to the beach and to Florida. Many side hustles are for this exact purpose. Business owners use side hustles to pay for things that may not be possible with their regular jobs. Having Key Metrics helps me not let my business get away from me. If it becomes too much, I will not be able to travel because of the responsibility of the business will keep us in town.
With any business venture, it is important to know why you are opening it. Is it because you are passionate about your product or your service? Is it because you want to be your own boss? (Be careful if this is your reason for starting a business, because when you own a business, you go from having one boss to having every customer being your boss.) Are you starting a home based business so that you can pay off some debt or travel? Your reasons for starting your business will clue you into what your key metrics will be. Often, when you open a business, friends, family, and acquaintances will be full of advice and ideas of what you should do in your business. It’s important to note that, in most cases, they are excited for you and want to help. If you are clear about why you are opening your business and what purpose it serves for you in your life, Evaluate your key metrics often so that you know if your business is working for your. Be careful of evaluating profits and outgoing money so that you know if you are in trouble financially and can change gears before you go too far into debt.
One key metric should always be making sure your customers are happy. This ensures that your business is sustainable and that it will still be able to be something you enjoy.
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