Ryan DeissCo-Founder & CEO, The Scalable Company

The most important metric to track if you want your business to grow

8 Aug 2026 · 2 min

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1:34

In this brief conversational exchange, Speaker A asks a series of binary questions comparing average order value (AOV) with other business metrics—conversion rate, customer concentration, runway, revenue per employee, churn, cash flow, CAC, and LTV—specifically for a company generating about $2 million in revenue. Speaker B consistently favors AOV as the primary lever for growth, arguing that a higher AOV provides more capital to fund acquisition and reduces reliance on external financing. However, when the comparison reaches cash flow, Speaker B pivots, declaring cash flow the single most critical metric at the $2 million stage. The rationale is that cash flow reflects surplus value, profitability, and the ability to reinvest; without strong cash flow, a business in this revenue band risks failure. The dialogue ends with Speaker A confirming that cash flow is indeed the most important metric at $2 million.

Average order value or conversion rate?
Average order value. If you can increase your average order value, you're gonna have more to invest in acquisition. Conversion rate matters, but let's just get our people worth more.
Average order value or customer concentration?
Average order value. Customer concentration comes later.
Average order value or runway?
Average order value. Runway only matters if you raise a bunch of money. And if you have a high enough average order value, you don't need to do that. You can fund your business from your customers.
Average order value or your revenue per employee?
$2 million? Dang. I'm still gonna give the nod to average order value. Average order value or churn? If you're in a software subscription, churn really, really matters, but since average order value should be a function of churn, I'm gonna give it, still keep it average order value. Average order value or cash flow? Cash flow. Cash flow, distributable cash, what is our profit, how much do we have to reinvest? That is a sign that you are creating surplus value. It's a sign you're running a good business. And at $2 million, you're about to go into no man's land. So if you don't have good cash flow, you're dead. Cash flow or cost to acquire a customer? Cash flow. Cash flow or LTV? Cash. Cash is the one that's just— that is the essential metric you must be tracking. How much excess cash do you have to actually deploy, especially at $2 million?
So is cash flow the most important metric at $2 million?
Absolutely. You're entering— stage of business where you have about to have all of the expenses and complexities of an 8-figure business with the revenue of a 7-figure business to support it, if you're not watching your cash flow, you're dead.