1. Revenue per Employee
Why it matters: This metric reveals your team’s productivity and operational efficiency—two critical factors for scalable growth in an EOS-driven organization.
How to calculate: Revenue per Employee = Total Revenue ÷ Number of Employees
Strategic benchmark: While service-based businesses typically aim for $150K-$250K per employee, we work with clients to establish benchmarks specific to their industry and growth goals.
Action steps: If your number falls below target, we can help you identify opportunities to optimize staffing, improve efficiency, or adjust pricing. If it’s exceptionally high, we’ll explore solutions to prevent burnout and strategic investments in automation or talent.
2. Gross Profit Margin
Why it matters: EOS businesses thrive on predictability. A strong Gross Profit Margin ensures you’re covering operating expenses while maintaining the cash flow needed to fuel your vision.
How to calculate: Gross Profit Margin = ((Revenue – Cost of Goods Sold) ÷ Revenue) × 100
Strategic benchmark: Most of our clients aim for 30%-50%, with service-based businesses often achieving higher margins with the right strategic approach.
Action steps: When we see declining margins, we partner with you to address rising costs, evaluate pricing strategies, and identify process inefficiencies—all perfect topics for your quarterly EOS sessions.
3. Operating Cash Flow (OCF)
Why it matters: As your financial partner, we know that healthy cash flow is the lifeblood of an EOS-run company, providing the resources you need to fund growth initiatives and avoid unnecessary stress.
How to calculate: OCF = Net Income + Non-Cash Expenses – Changes in Working Capital
Strategic benchmark: We help our clients maintain positive and consistently growing OCF to ensure long-term stability and support their vision.
Action steps: If OCF trends negative, our team will help you address root causes such as slow-paying clients, expense management, or inefficient collections processes—providing concrete solutions for your Level 10 meeting IDS sessions.
4. Days Sales Outstanding (DSO)
Why it matters: Your ability to convert sales into cash directly impacts your capacity for growth and investment in your business.
How to calculate: DSO = (Accounts Receivable ÷ Total Credit Sales) × Number of Days
Strategic benchmark: We find that our most successful clients maintain a DSO of 30-45 days, though we tailor expectations based on industry norms and business models.
Action steps: If your DSO increases, our team can help implement stricter payment terms, streamline invoicing processes, and develop effective collections strategies to get cash flowing back into your business faster.
5. Net Profit Margin
Why it matters: This comprehensive metric shows how effectively you’re transforming revenue into profit—the ultimate measure of your business’s financial health.
How to calculate: Net Profit Margin = (Net Profit ÷ Total Revenue) × 100
Strategic benchmark: We typically guide service-based businesses toward 10%-20% targets, while helping product-based businesses establish appropriate industry-specific goals.
Action steps: When margins shrink, our strategic approach includes analyzing expense structures, evaluating pricing models, and optimizing operations to restore and improve profitability.
