Resources  /  Entrepreneurs  /  Guide GUIDE 03 · METRICS · Entrepreneurs

Founder Metrics 101

Three numbers separate founders who steer from founders who drift: what a customer costs, what a customer is worth, and where customers come from.

You don't need a dashboard with forty charts. You need three numbers you actually believe — because every strategic question (raise prices? hire? double the ad budget?) is really a question about them.

CAC: what a customer actually costs

Take everything you spent acquiring customers last quarter — ads, tools, the outreach hours at an honest hourly rate — and divide by customers won. Founders routinely exclude their own time and conclude marketing is "free"; it isn't, and the moment you delegate, the illusion collapses. Know the real number now.

LTV: what a customer is actually worth

Not the first sale — the relationship: average purchase × purchases per year × years they stay. A $500 first job from a customer who returns twice a year for five years is a $5,000 relationship. This number decides how much you can rationally spend to acquire — and it's why businesses with reactivation systems can outbid competitors for the same attention.

The ratio that answers "can I afford marketing?"

LTV ÷ CAC. Below 3, your economics are tight — fix retention or pricing before scaling spend. Above 5, you're probably underinvesting in growth. This single ratio settles more founder arguments than any opinion.

Channel math: find the workhorse

Ask every new customer one question — "how did you find us?" — and log it. Within a quarter, a pattern emerges that surprises almost everyone: one channel quietly carries the business. The move is nearly always to double down on the workhorse before diversifying; diversification is a luxury of businesses whose first channel is saturated.

The monthly numbers review

None of this works as a one-time exercise. Thirty minutes, once a month, same three numbers, plus one decision made because of them — that's the whole practice. It's also precisely what a Growth Partner advisory session is: your numbers, reviewed with someone whose job is to catch the expensive mistake before you make it.

Common Questions
What is a good customer acquisition cost for a small business?

There's no universal number — CAC is only meaningful against LTV. A $300 CAC is a bargain for a $5,000 relationship and a disaster for a $400 one. Aim for LTV at least 3× CAC.

How do I calculate lifetime value for a service business?

Average sale × purchases per year × average years retained. Estimate honestly from your records; even a rough LTV beats pricing and marketing decisions made blind.

Which marketing channel should a startup focus on first?

The one already working, even weakly. Ask every customer how they found you, find the pattern, and saturate that channel before adding another. Focus beats diversification until the first channel is maxed.

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