Two Metrics That Small Business Owners Trying to Grow Should Get Familiar With

1️⃣ Customer Acquisition Cost (CAC)

How much it costs you to get one new customer.
💭Think: marketing spend, ads, sales calls, proposals, onboarding time.

2️⃣ Customer Lifetime Value (LTV)

How much revenue (or profit) that customer brings you over their entire relationship with your business.

🔑Here’s the key:

🧠 If your CAC is higher than your LTV, you’re losing money—even if you’re selling a lot.

The sweet spot?
📊 A healthy LTV:CAC ratio is at least 3:1.
That means for every $1 you spend to acquire a customer, you earn $3 (or more) in return.

So Why Does This Matter?

If you don’t know these numbers:
❌ You might be spending too much to win customers
❌ You might be underpricing your services
❌ You won’t know how much you can afford to spend on marketing
❌ And you’re flying blind when it comes to scaling your business

As a bookkeeper, I work with small business owners not just to track expenses—but to use data to price smarter, market more effectively, and grow profitably.

If you’re not sure what your CAC and LTV are, it’s time to find out.