Are You Stuck Working "IN" Your Business?
Free Up Time & Scale Faster →There are 2 things in business: the stories you tell yourself… and facts of what's really happening.
The numbers are the facts. They are the guide. They show you what's working, what's not, where to focus and what to fix.
And with a recession looming (or here already!), knowing the key KPIs in your business is more important than ever. Because the reality is:
Happen During Recessions
So are you prepared to not only survive… but thrive? Here are the key metrics you need to know that will put you ahead with clarity and control.
There are a few principles we live by at 2X. These principles are the key to over $255M+ in client growth — and most importantly, so many lives changed and hours freed up by building a better, simpler, more strategic business.
One of those principles is: Numbers Rule.
Numbers are fact. They take out the guesswork and show you the reality. From there, you can see where you need to focus. You can get your team aligned. You can work better, smarter. And make your life easier as CEO.
But after working with hundreds of 6/7-figure businesses across the globe, here's what I've learned about most entrepreneurs:
- Most are NOT tracking their key metrics
- Most don't know the right numbers to track
- Most that do track numbers are optimizing for the WRONG metrics
So as a result… most are driving blind.
Or at the least, they are driving their business by only looking at revenue and profit (15+ days after the month ends) — which is like driving their business by looking in the rearview mirror.
That is a tough way to run and grow a business! Especially if you want to go fast. No wonder most fail. And even more, most get stuck at a certain revenue level and can't break through.
Let the numbers show you what to do. That's what this guide is all about — and specifically to prepare you for a recession.
- Keep it simple — that's why this guide covers 10 metrics
- The RIGHT numbers (not vanity metrics) are all that matter
- Incorrect numbers are worse than no numbers
- The metrics you track should be aligned with your big goals and vision
- Small and consistent improvements trump trying to be a hero and fix them all overnight
- Make it a culture thing — every day, every meeting, take this to your team so they see the numbers clearly
Are we in a recession? There's not exactly one term that confirms it — most of the numbers used are very much lagging metrics, so we only usually know after the fact. Regardless, there are a few key indicators worth knowing.
GDP is the primary one. And outside of the initial COVID impact, 2022 marked the first time we'd seen negative GDP in a long time:
Consumer sentiment is another indicator — and it's down significantly, which tells a meaningful story about where confidence and spending may be headed:
Not one of these will give us a definitive answer — but they're important to be aware of. The key is to know the smart KPIs that are best for you to track. Let's get into those now.
Before we get started with which KPIs to track, it's important to understand what a business KPI is and how using one can be essential for businesses of all sizes.
A KPI, or key performance indicator, is used for measuring the performance and progress of a business. By using a KPI chart or board, businesses are able to get an overview of the key indicators that have been given defined goals in order to track progress. A business KPI measures things like sales, costs, profit margins, and customer satisfaction rates.
These KPIs are relevant for most industries, but created with our audience in mind — primarily for online service-based businesses like course creators, coaches, consultants, and digital agencies. If you'd prefer to watch the breakdown instead of read, click play below.
First and foremost, let's talk about cash. How much free cash do you have in your business bank account right now?
You need some "dry powder" to handle the storms, capitalize on opportunities, keep you in the right state of mind, sleeping like a baby at night, and making the right decisions.
Lack of cash (and cash flow) is not only the #1 issue that causes small businesses to fail — it's the #1 thing that impacts your stress level and decision making. Without it, you'll have to make short-term, reactive and scarcity-based decisions… which does not lead to thriving.
One thing you can do right now: set up a daily text or email notification from your bank so you're always on top of your cash balance.
Cash is only one measure — it really depends how long that cash can sustain you. That's your runway.
Based on your upcoming expenses, if you received zero new revenue, how long could your business last? For example:
- If your total business expenses are ~$50,000/month
- And you have $100,000 in cash — you have 2 months of runway
- If you only have $25,000, that's just two weeks — a very scary position
- At a minimum: two months of runway
- Ideally: more than three months
- This becomes your new baseline — a floor you don't go below
With the right runway in place, you can handle big expenses or market shifts — and keep making the right decisions for your business, not scarcity-based ones.
This is one of our favorite metrics to track for all of our private 2X clients. It shows in one chart how you're truly trending — because on any given week or month, sales can be up or down. Over 3–6 months, though, you should see a consistent upward trend unless your business is seasonal.
Start tracking your rolling 90-day revenue right now. Are you driving consistent, predictable growth? Flatlined? Declining? This chart tells the whole story and will make it very clear where your focus needs to go.
Spotting a downward trend early is everything. You can't course-correct if you're not looking. Most businesses only realize a revenue problem a month or two after it started — by which point they're already in scramble mode. Stay ahead of it.
Your profitability may take a hit during a recession — especially with inflation running at the same time. So a clear number to track is your profit margin, or even better (if you use accrual accounting), your true cash flow.
It's wild how many 6/7-figure business owners don't know their true profitability, don't know what healthy margins look like for their industry and model, and as a result, aren't hitting the margins they should. We can help you change that.
Revenue is vanity, profit is sanity, cash is king. Most of the entrepreneurs I talk to are focused on the top line and have no idea what's happening at the bottom. In a recession, your margin is your survival margin.
It is critical — especially when the economy is not thriving — to protect your revenue. The best future customers you have… are your current customers. It's far easier to keep existing clients and have them buy more than it is to acquire new ones.
So keep them. Track a key fulfillment metric to see if more people are canceling or buying less. This is a great leading indicator — and it leads to a better business regardless of the economy.
As I cover in From 6 To 7 Figures and in our core methodology: growth begins with fulfillment. Know your key customer metrics to maximize lifetime value (LTV) and build a wildly profitable business. This importance only goes up during a recession.
Your A/R is your accounts receivable — how much money is owed to your business. If other businesses or customers are impacted by a recession, they may be missing payments, having failed charges, extending bills, or changing payment terms.
This is a crucial number to track. And one that will be a great indicator of how your business is being impacted by the broader economy.
Many businesses either don't have a good system to track A/R, or only realize a problem after weeks pass — then get behind. Get a system in place to manage your billing and A/R and stay on top of it, because it's obviously crucial to collect the money that's owed to you.
Just like for your business, having the proper personal cash on hand helps you sleep at night. For yourself and your family, put money aside for a "rainy day" and make that the new zero.
- At least 6 months of personal expenses in cash — untouched
- Example: $10,000/month expenses = $60,000 minimum cash reserve
- This is separate from business funds and not used for operations
You may feel there are smarter things to do with your money. But even in crazy inflation, it's worth the peace of mind to have that nest egg as a separate, protected baseline.
One of the best ways to "grow your business" is to increase your profits — and one of the fastest hacks you can address is optimizing your operating expenses. Do this after reading this guide.
Do you know your P&L well and understand where your money is flowing? Have you optimized expenses by department to increase profitability?
Knowing and managing your operating expenses is important now more than ever. Dive in, understand them, and optimize them.
If you do sales calls, track those. If you go directly to sales, track those. Keeping on top of this number lets you see whether interest in your product or service is slowing — and take action before it becomes a crisis.
A recession is actually a great time to keep marketing and double down on generating more sales. A lot of your competitors will pull back — which presents a massive opportunity for you to take market share.
The businesses that grow the fastest during recessions are the ones that didn't flinch. They stayed visible, they kept selling, and they picked up the clients their competitors were too scared to go after.
Last but not least, have a finger on the pulse of what's happening in the broader economy. Don't use this to be afraid — use it to understand what is happening, what the sentiment is, and what your opportunities are.
There's not one single metric, but the key indicators relate to: GDP, Unemployment, Inflation, and Confidence Indexes.
Each of these can give you insight — but the key is to be ahead of what's happening and ready to capitalize. With a recession comes enormous business opportunity: more employees available, great talent entering the market, mergers and acquisitions, discounted marketing as others pull back, and new business openings everywhere.
If you're on top of the situation — and ahead financially with the other key metrics listed — you'll be perfectly positioned to capitalize.
Happen During Recessions
If you're starting from scratch, this can feel like a lot. It's overwhelming. So take it one step at a time.
If you haven't yet, watch the accompanying video above. Austin breaks each KPI down visually in under 15 minutes.
The first things to nail are your cash balance and a fully updated, well-understood P&L. Get a clear picture of the health of your business and your baseline metrics before anything else.
Then understand your revenue and other key trends. Are you going up, down, or flat? This gives you foresight into where you're headed — and what you need to change to keep growing through any economy.
Get a baseline of where you're at for each of the metrics above. Then create a dashboard — a KPI scorecard for your business — and track these numbers ongoing. They will give you the clarity and confidence to make the right decisions and set your business up to win.
Let Us Help You Master Your Numbers
& Scale With Clarity
We work hands-on with ambitious 6/7-figure entrepreneurs across the globe — helping you define the right metrics, build your KPI dashboard, and scale a wildly successful business without being owned by it.
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