Short transcript excerpt from a YouTube video discussing essential KPIs for IT service-based companies. The speakers recommend tracking gross margin (target ~60%), marketing & sales spend (~10%), G&A (5–10%), revenue per employee (aim ~ $10,000), average order value, and customer lifetime value to inform budgeting and decision-making.
Can you share with us a few really key KPIs that you say these are the bare minimum that you need to be tracking right now so that you can make those.
Informed decisions. So I would say if your accounting team is not tracking your people costs under cost of goods sold, they need to for IT service based companies. Because we know that we need our gross margin to be around 60% because we know that we're going to have 10% marketing spend and sales spend immediately right there. And then we should have budgets around our G and A, which could be 5 to 10% depending on the company. And so we need to make sure that we understand that portion first. Then we got our revenue per employee, which is another profit per employee. We try and aim for $10,000 and then making sure that we've got like our average order value tracked, that's really, really important, as well as our lifetime value, because our lifetime value is going to tell us, all right, how much money are we going to make out of each client over the course of their contract?