Operational metrics
Track burn rate, runway, team productivity, and operational efficiency metrics to ensure sustainable startup growth
Operational metrics help you understand the health and efficiency of your startup’s internal operations. These metrics ensure you’re building a sustainable business that can scale effectively.
Financial health metrics
Burn rate
Monthly burn rate is how much cash your startup spends each month.
Gross burn rate = Total monthly expenses
Net burn rate = Monthly expenses - Monthly revenue
Example calculation:
- Monthly expenses: $100K
- Monthly revenue: $30K
- Net burn rate: $70K/month
Runway
Runway is how long your startup can operate before running out of cash.
Runway = Cash in bank ÷ Monthly net burn rate
Example calculation:
- Cash in bank: $500K
- Monthly net burn rate: $50K
- Runway: 10 months
Burn efficiency
Burn multiple = Net cash burned ÷ Net new ARR
Example calculation:
- Net cash burned this quarter: $300K
- Net new ARR added: $100K
- Burn multiple: 3x
Benchmarks:
- Under 1.5x: Exceptional efficiency
- 1.5x - 2.5x: Good efficiency
- 2.5x - 4x: Acceptable
- Over 4x: Concerning
Capital efficiency
Months to profitability: Based on current growth and burn trends
Revenue per dollar raised: How much ARR you generate per dollar of funding
Growth capital efficiency: Revenue growth per dollar of incremental spend
Team productivity metrics
Revenue per employee
Revenue per employee = Annual revenue ÷ Number of employees
Benchmarks for B2B SaaS:
- Early stage: 200K per employee
- Growth stage: 400K per employee
- Mature stage: 500K per employee
Hiring efficiency
Time to hire: Average days from job posting to accepted offer
Cost per hire: Total recruiting costs ÷ Number of hires
New hire productivity: Time for new employees to reach full productivity
Employee retention: Percentage of employees who stay after one year
Department-specific productivity
Engineering productivity:
- Features shipped per sprint
- Code deployment frequency
- Bug resolution time
- Technical debt metrics
Sales productivity:
- Revenue per sales rep
- Quota attainment rates
- Sales cycle optimization
- Win rate improvements
Customer success productivity:
- Customers per success manager
- Churn prevention success rate
- Expansion revenue generated
- Support ticket resolution time
System performance metrics
Product reliability
System uptime: Percentage of time your product is available
Response time: How quickly your application responds to user requests
Error rates: Percentage of requests that result in errors
Scalability metrics: How performance changes with user load
Infrastructure efficiency
Cost per user: Infrastructure costs divided by active users
Resource utilization: How efficiently you use computing resources
Scaling elasticity: How quickly you can handle traffic spikes
Development velocity
Deployment frequency: How often you release new features
Lead time: Time from code commit to production deployment
Mean time to recovery: How quickly you resolve production issues
Change failure rate: Percentage of deployments that cause problems
Customer support metrics
Support volume and resolution
Tickets per customer: Average support requests per customer
First response time: How quickly you respond to new tickets
Resolution time: Average time to fully resolve issues
First contact resolution: Percentage resolved in first interaction
Support quality
Customer satisfaction (CSAT): Rating of support interactions
Net Promoter Score (NPS): Customer likelihood to recommend
Support channel effectiveness: Performance across email, chat, phone
Self-service adoption: Percentage using help docs vs contacting support
Support team efficiency
Tickets per agent: Volume each support person handles
Resolution rate: Percentage of tickets fully resolved
Escalation rate: Percentage requiring manager or specialist involvement
Agent satisfaction: Internal satisfaction with tools and processes
Cash flow and working capital
Cash flow timing
Collections period: Average days to collect payment from customers
Payment terms: Standard payment terms offered to customers
Cash conversion cycle: Time from customer acquisition to cash collection
Working capital management
Days sales outstanding (DSO): Average collection period
Deferred revenue: Prepaid subscriptions and their cash flow impact
Seasonal patterns: How cash flow varies throughout the year
Financial forecasting
13-week cash flow forecast: Detailed short-term cash planning
Monthly financial projections: Revenue, expenses, and cash needs
Scenario planning: Best case, worst case, and most likely scenarios
Vendor and partnership metrics
Vendor management
Vendor performance: Service level agreement compliance
Cost optimization: Regular review of vendor costs and alternatives
Contract terms: Favorable terms and renewal schedules
Partnership effectiveness
Partner-sourced revenue: Revenue from partner referrals
Partner satisfaction: Health of key strategic relationships
Integration performance: Technical partnership success metrics
Risk and compliance metrics
Security and compliance
Security incident frequency: Number and severity of security issues
Compliance audit results: SOC 2, GDPR, HIPAA compliance status
Data breach prevention: Measures and monitoring effectiveness
Business continuity
Disaster recovery testing: Regular testing of backup and recovery systems
Business continuity planning: Preparedness for operational disruptions
Insurance coverage: Adequate protection for key risks
Operational efficiency ratios
Cost structure analysis
Cost per customer served: Total operational costs ÷ Customer count
Variable vs fixed costs: Understanding cost structure flexibility
Economies of scale: How unit costs change with growth
Process efficiency
Automation rate: Percentage of processes that are automated
Manual work reduction: Decrease in manual tasks over time
Process standardization: Consistency across operations
Quality metrics
Error rates: Mistakes in key operational processes
Rework percentage: How often work needs to be redone
Quality assurance effectiveness: Catching issues before customer impact
Tracking operational metrics
Dashboard setup
Create operational dashboards for:
- Executive team: High-level financial and team metrics
- Department heads: Specific productivity and efficiency metrics
- Operations team: Detailed process and system metrics
Monitoring and alerts
Set up alerts for:
- Cash flow concerns: Low runway or high burn alerts
- System performance: Uptime and response time issues
- Team productivity: Significant changes in key metrics
- Compliance issues: Security or regulatory concerns
Regular reviews
Weekly operations reviews:
- System performance and issues
- Support metrics and escalations
- Team productivity indicators
Monthly business reviews:
- Financial health and burn rate
- Team hiring and retention
- Vendor and partnership performance
Quarterly strategic reviews:
- Operational efficiency trends
- Infrastructure scaling needs
- Process improvement opportunities
Use business intelligence tools that can aggregate operational data from multiple systems to provide comprehensive views of startup health and efficiency.
Common operational mistakes
Ignoring leading indicators: Focusing only on results instead of predictive metrics
Manual processes: Not automating repetitive operational tasks
Poor cash flow planning: Not forecasting cash needs accurately
Inadequate monitoring: Missing early warning signs of operational issues
Lack of standardization: Inconsistent processes that don’t scale
Taking action on operational metrics
High burn rate: Optimize expenses, improve efficiency, or accelerate revenue growth
Poor team productivity: Invest in tools, training, or process improvements
System performance issues: Scale infrastructure or optimize application performance
Low cash runway: Reduce burn, raise funding, or accelerate revenue growth
Inefficient processes: Automate manual work and standardize procedures
Operational metrics provide the foundation for sustainable growth. Strong operations enable you to scale efficiently while maintaining quality and customer satisfaction.
Next steps
With operational health tracked, you need to effectively share these insights with your team and stakeholders. Learn about communicating metrics to drive alignment and action across your organization.