Over 50% of college students have part-time jobs. Sometimes, they do this to cover their tuition, living expenses, as well as additional costs like professional academic help or tutors. However, often, young people land jobs to combine their studies with hands-on work experience and graduate with a solid set of skills crucial for their future careers.
While there are plenty of part-time job opportunities, there is an even more exciting path to undertake while you are in college. Launching a student business has many reasons and benefits.
For ambitious young people, it’s an opportunity to build up leadership and many other thought-after skills and become experts in their fields. On top of that, there is always a chance that this venture could turn out profitable.
Of course, creating a student business that brings revenue isn’t easy. In fact, it requires much more time and commitment than any regular job. However, with a reliable paper writer to cover your back academically and a good strategy, you should be able to succeed. Read on and we will tell you about the top eight metrics to focus on to ensure the growth and profitability of your venture!
Return on Investment
According to specialists, return on investment (or simply ROI) is one of the most pivotal metrics for business growth. Basically, this metric reveals whether you are achieving your goals and objectives and whether your venture is efficient in generating revenue. The higher the ROI, the more revenue you are getting from your investment. By understanding how it works and keeping track of it, you will be able to maximize your profit and ensure sustainable growth.
The next must-track metric is conversion rate. In a nutshell, it indicates how many new leads you are able to convert into paying customers. The traditional formula for calculating conversion rate looks like this – new leads acquired in a set period divided by the number of new customers acquired during the same period. The sooner you start keeping an eye on your conversions and looking for ways to boost the rates, the quicker your venture will grow.
There is a common mistake that many aspiring entrepreneurs make – they focus 100% of their effort on earning new clients, but completely forget about the importance of retaining their clients. Customer retention rate is a vital KPI that reveals how many customers return to do more business with you. These returning customers stand for the stability, growth, and profitability of your company. So you should really start monitoring this rate to support your growth.
While assessing how many clients stay with you is important for success, measuring the number of customers who leave is also crucial. That’s what the churn rate is there for. By calculating this KPI, you will be able to ensure that your company has a good balance between returning and leaving customers. This will help you ensure that you are delivering the best customer experience, which is one of the basic components of growth and profitability.
Customer Acquisition Cost
Of course, acquiring new clients is vital for every business. After all, customers are the funnel that keeps your venture scaling. But this doesn’t mean that acquiring new clients is efficient at any cost. In order to ensure success, you need to ensure that the price of every buyer is low enough to give you a solid profit margin. The customer acquisition cost (or CAC) is a KPI that demonstrates how much money your company spends to receive every client. By keeping an eye on this metric, you should be able to ensure a positive ROI for your company at all times and, thus, generate more revenue.
Now, this KPI is one of the most crucial ones for student entrepreneurs. If you are running a startup in college, chances are that you have a rather limited budget to invest in growing and marketing your venture. In most cases, students will use free or very cheap marketing methods to drive new prospects.
Some of the best cost-effective tactics include SEO, SMM, and email marketing, and all these tactics lead prospects to your company’s website. Tracking your website’s traffic is important to help you measure the results of your marketing efforts. Thus, this is one of the indicators that you really need to keep an eye on to make your business truly successful.
The next thing you want to keep an eye on is your sales revenue. Whether you are offering a product or service, you are making sales one way or another. And, of course, you want to know how much money you gain from your sales. That’s why you need to calculate your sales revenue regularly. This KPI is rather easy to calculate. Basically, sales revenue equals the total number of sales made during a specific period multiplied by the price per sale. Use this formula to get more control over the profits you generate and set your venture on the fast track to success.
Finally, one more metric student entrepreneurs should keep track of is gross margin. In a nutshell, the gross margin is the difference between the revenue you generate and the actual cost of goods you sold. Simply put, it reveals how much money you keep after all costs are deducted from the sale. For example, if your overall revenue is $100 and the overall cost of goods sold is $80, your gross margin is $20 or 20%. The main reason why this metric is so crucial is that it shows you how well your startup manages its costs.
The Bottom Line
Running a business as a student is not easy. Of course, such ventures require significant time and effort commitments, as well as a good understanding of the inner business process. However, ensuring success and profitability is still possible. Now you know about the most pivotal metrics that will help you measure the success of your venture, find weak spots, and set up your company for growth.