Session 7

Key Metrics & Cash Flow

Revenue is vanity. Profit is sanity. Cash flow keeps you alive. Measure what matters and nothing else.

I’ve watched companies do $10M in revenue go out of business in the same year. They had customers. They had product. They had a team. They ran out of cash. That’s the only metric that actually kills you.

I check cash flow every single day. Not weekly. Not when my accountant sends a report. Daily. If you don’t, growth will surprise you in the worst possible way — usually right after you’ve taken on more inventory or more payroll than your bank account can carry.

What Gets Measured Gets Managed

And what gets managed grows. The reverse is just as true — what you don’t measure quietly rots. Your job in this session is to pick the 3–7 numbers that, if they all went up, would mean the business is genuinely winning. Then make those numbers visible every week.

Vanity Metrics vs. Real Metrics

Vanity metrics make you feel good. Real metrics tell you the truth.

Vanity metrics aren’t useless — they can be early signals. They become dangerous when they become the scoreboard.

Metrics Worth Tracking

Every business is different. Here’s the menu — pick the ones that actually connect to creating and retaining customers in your business:

Acquisition

Retention & Lifetime Value

Revenue Health

The Only Three That Actually Kill You

Cash on hand (and weeks of runway)
Gross margin
LTV : CAC ratio

If those three are healthy, you survive almost anything. If they’re not, you die — even with revenue going up and to the right.

Borrowed Brilliance

Alex Hormozi · Acquisition.com

The Funnel Metrics That Matter

Deiss reduces marketing measurement to three numbers that every founder needs to know by heart:

The key ratio is LTV ÷ CAC. Anything under 3:1 and your growth engine is expensive and fragile. Anything above 5:1 and you should probably be spending more on acquisition. Most founders are guessing. The ones at 8-figures know these numbers cold.

Cash Flow Is King

Growth eats cash. Every. Single. Time. You sell more, you need more inventory. You hire more, payroll balloons. You expand, you sign a bigger lease. Six months later you’re profitable on paper and broke in the bank account.

The discipline: watch cash daily, not monthly. Know your bank balance. Know your weeks of runway. Know your largest receivable. Know your largest payable due. You don’t need fancy software — a Google Sheet updated each morning works.

Make a Budget. Yes, Really.

Budgets aren’t just for Fortune 500 companies. They’re how you decide where the next dollar goes before you have to. Forecast where you think revenue will be. Forecast where expenses will be. Then break it down by department.

This is huge: budgeting by department lets you make categorical decisions. “This segment lost $80K this quarter — is it worth keeping?” You can only ask that question if your numbers are organized that way. Most founders run the business as one big lump and can’t see which parts are funding which other parts.

Think in $10K Hours

Apply the same scoreboard mindset to your own calendar. Ask daily: “Am I working on $10 tasks or $10,000 tasks?”

If you spend 30 hours a week on $10 tasks and 10 hours on $10,000 tasks, your output is roughly $100K + $300 = $100,300. Flip the ratio — 30 hours on $10K work, 10 on $10 work — and your output is $300K + $100 = $300,100. Same person. Same week. Same effort. Triple the result. The metric of your life is which tasks you choose.

Build the Weekly Scoreboard

Whatever metrics you pick, put them in one place. A single Google Sheet, Notion table, or dashboard. Update it every Monday morning. Review it in your weekly cadence meeting (Session 9).

The act of looking at the same numbers in the same place every week is how you start to develop a feel for the business. Without that, you’re just reacting to whatever feels urgent.

The $10K Question

If a banker walked into your office this afternoon and asked for your three most important numbers, could you say them from memory — and would they impress her?

Action Steps for Session 7:

Pick your 3–7 key metrics. Make sure they include cash on hand, gross margin, and LTV:CAC.
Find or estimate the current value of each. Where you don’t have it, set up the tracking this week.
Build a single dashboard (Sheet/Notion/Excel) with these numbers updated weekly.
Build your first by-department budget for next quarter. Even rough is better than none.
Add your key metrics and current values to your CEO Snapshot.