How to measure business growth: a guide for SMMEs

Why track growth at all

Being busy is not the same as growing. Measuring business growth gives you figures to compare period by period, so you can tell whether your changes pay off. Comparing year on year also stops the festive season or Black Friday from distorting the trend.

The core business growth metrics

Four measures are a good starting point for most SMMEs:

• Revenue growth rate: how quickly turnover rises or falls from one period to the next. Learn how to calculate your growth rate.
• Customer growth: how the number of active customers changes.
• Customer retention: the percentage of customers who keep buying from you over a period.
• Gross margin: the percentage of revenue left after cost of sales.

What each metric tells you

Core business growth metrics at a glance

Metric	What it tells you	How often to check
Revenue growth rate	Are sales higher than before?	Monthly or quarterly
Customer growth	Do you have more customers?	Monthly
Customer retention	Do customers keep coming back?	Quarterly
Gross margin	Is the growth profitable?	Monthly or quarterly

Reading the numbers side by side

One figure seldom gives the full picture. A Durban online retailer can boost turnover with Black Friday discounts while its margin shrinks, and customer numbers can climb while retention drops. Check growth and quality metrics together before you decide anything.

Get your Growth Score

Combine these measures into one score and see where to focus.

Frequently asked questions

How often should I measure business growth?

Check fast-moving figures such as turnover and new customers monthly, and slower ones such as retention quarterly. Above all, keep the periods the same each time.

What counts as a good growth rate?

That depends on your sector, size and stage. Benchmark against your own track record first, then against similar businesses.