Name the growth mechanism before choosing a metric
| Growth mechanism | First question | Required units or horizon | Primary owner |
|---|---|---|---|
| Acquire customers | Does bounded contribution recover aligned acquisition cost? | CU/customer or cohort; finite horizon | CAC and payback owners |
| Retain customers or revenue | Does retained contribution cover the intervention cost? | customers or recurring CU/cohort/period | Churn and retention owners |
| Change recurring revenue or service model | What changed in new, expansion, contraction, churn and service cost? | account and CU/period | SaaS and recurring owners |
| Increase campaign or channel activity | Is contribution incremental to a comparable baseline after programme cost? | CU/campaign and conversion/customer basis | Campaign and commission owners |
| Add delivery capacity | Which resource becomes constrained and what step cost changes? | productive hours, shifts, FTE or delivery object | Capacity and staffing owners |
| Make an expansion commitment | Are demand, contribution, working capital, cash and dependencies resolved? | dated scenario and evidence states | Expansion scorecard |
Match contribution, payback, capacity and cash
Contribution tests what remains on a declared delivery or service-cost boundary. Payback adds acquisition cost and a finite cohort horizon. Capacity asks which resource prevents the plan from being delivered. Dated cash asks whether receipts and commitments fit the calendar. These views connect, but none substitutes for whole-period operating profit or another view.
Align records before running a scenario
- Name one growth mechanism and the customer, account, campaign or capacity object. (not complete)
- Align acquisition and contribution cohorts and use one finite horizon. (not complete)
- Separate observed outcomes, attribution assumptions and proposed changes. (not complete)
- Include service, onboarding and capacity costs that change with the mechanism. (not complete)
- Prepare a dated cash downside case before a commitment consumes cash. (not complete)
Worked scenario: choose the first test, do not score it
A finite customer-acquisition scenario
These are invented, tax-excluded neutral-CU assumptions. They do not predict demand, retention or causality.
| Case | Intermediate arithmetic | Outcome |
|---|---|---|
| Acquisition cost | 4,000 CU programme spend ÷ 100 acquired customers | 40 CU/acquired customer |
| Base finite cohort | 80 average active customers × 30 CU contribution × 3 months − 4,000 | 3,200 CU contribution after acquisition |
| Lower-retention assumption | 60 average active customers × 30 CU contribution × 3 months − 4,000 | 1,400 CU contribution after acquisition |
Choose the narrow next owner
| Decision branch | Exact tool owners | Why this branch is next |
|---|---|---|
| Acquisition and customer value | customer-acquisition-cost; cac-payback; customer-lifetime-value; ltv-cac-ratio; lead-value; conversion-economics | Align customer state, acquisition cost, contribution and finite horizon |
| Retention | retention-profit-impact; subscription-churn-impact | Test retained contribution and intervention cost without inventing a retention benchmark |
| Recurring and SaaS | recurring-revenue-mrr-arr; saas-gross-margin; freemium-conversion-economics; annual-vs-monthly-plans; seat-vs-usage-pricing; subscription-pricing-tiers; expansion-revenue-plan; support-cost-per-account; customer-onboarding-payback | Keep account state, service-cost boundary and recurring period aligned |
| Campaign and incentive | campaign-profitability; agency-campaign-margin; affiliate-commission-profit; influencer-break-even; sales-commission-plan-profitability | Compare incremental contribution with a declared baseline and programme cost |
Open the exact Growth workflow
- Customer Acquisition Cost Planner
Measure loaded and marginal customer acquisition cost across aligned channels
- CAC Payback Planner
Find when retained customer contribution recovers acquisition cost
- Customer Lifetime Value Planner
Estimate bounded contribution value across a chosen retention horizon
- LTV to CAC Ratio Planner
Compare bounded contribution LTV with entered acquisition cost and target ratio
- Lead Value Calculator
Estimate contribution-based lead value and a sustainable cost-per-lead ceiling
- Conversion Economics Planner
Translate traffic and conversion assumptions into contribution and allowable acquisition spend
- Customer Retention Profit Impact Planner
Test whether a proposed retention improvement covers its programme cost for one cohort
- Subscription Churn Impact Planner
Keep logo and revenue churn separate while estimating annual contribution and replacement acquisition impact
- Recurring Revenue MRR and ARR Planner
Reconcile recurring-revenue movements and inspect closing MRR, ARR, GRR and NRR on one cohort basis
- SaaS Gross Margin Planner
Reconcile recurring revenue with an explicitly classified service-cost stack and inspect gross contribution and margin
- Freemium Conversion Economics Planner
Test whether user-entered conversion and paid-account contribution can cover free-account service and programme costs
- Annual vs Monthly Plan Planner
Compare upfront annual cash and contribution with a retention-weighted monthly subscription cohort
- Seat-based vs Usage-based Pricing Planner
Compare seat-based and usage-based contribution on one service-cost basis
- Subscription Pricing Tier Planner
Compare two subscription tiers by revenue, usage-linked service cost, support burden and raw contribution rank
- Expansion Revenue Planner
Test adoption-driven expansion MRR against contraction and programme cost
- Support Cost per Account Planner
Allocate support labour and vendor cost across active accounts and handled tickets
- Customer Onboarding Payback Planner
Find when retained monthly contribution recovers customer onboarding and acquisition cost
- Campaign Profitability Planner
Evaluate total campaign contribution after incrementality and campaign cost
- Agency Campaign Margin Planner
Price agency campaign delivery after media handling, scope reserve and target margin
- Affiliate Commission Profit Planner
Set a sustainable affiliate commission after returns and incrementality
- Influencer Break-Even Calculator
Calculate contribution-based influencer campaign break-even and fee ceiling
- Sales Commission Plan Profitability
Compare commission plans and tier behaviour while protecting contribution after pay, refunds and sales-support cost
When the expansion scorecard takes over
Move to the small-business expansion decision scorecard when the business is evaluating one concrete, potentially irreversible commitment. The scorecard preserves evidence states and stop conditions; this pillar does not reproduce its readiness record or make the funding decision.
Mistakes and stop conditions
- Selecting a metric before naming the growth mechanism.
- Using revenue where contribution is required or mixing acquisition and contribution cohorts.
- Treating attributed conversions as causal incrementality or using infinite LTV.
- Ignoring service, onboarding or stepped capacity cost.
- Treating MRR or ARR as dated cash.
- Allowing a positive contribution total to overwrite a cash-floor breach.
- Averaging unlike mechanisms into one growth score.
Growth-economics questions
- Which metric should a small business use for growth?
- Use the metric owned by the first binding constraint after naming the mechanism. No single metric covers acquisition, retention, capacity and cash.
- Is customer acquisition cost enough?
- No. Align CAC with contribution, customer state and a finite horizon, then test capacity and dated cash.
- When should retention be tested before acquisition?
- When observed cohort loss or service economics can erase the contribution from new customers. Reconcile the cause before assuming an intervention works.
- Can recurring revenue grow while contribution weakens?
- Yes. Expansion, contraction, churn, discounts and service cost can move differently from headline recurring revenue.
- How can profitable growth consume cash?
- Acquisition spend, inventory, receivables and capacity commitments can occur before related cash receipts.
- When should I use the expansion scorecard?
- Use it for one concrete expansion commitment that needs evidence states, dependencies and explicit stop conditions.
Sources and decision context
- US SBA: Grow your business — US Small Business Administration: US publisher used only for durable preparation context, not a Global eligibility or funding rule.
- OECD: SME financing, business conditions and growth — OECD: Context that constraints differ across SMEs; no benchmark or individual recommendation.
- UK government research: Understanding growth in small businesses — UK Department for Business, Innovation and Skills: Background on heterogeneous constraints; not a universal prescription or current prevalence claim.
- OpenStax: Relevant information for decisions — OpenStax: Educational support for comparing relevant changes between named alternatives.