Business Plan for Startups: KPIs & Assumptions

Why KPIs and Assumptions Matter in a Startup Business Plan

A business plan that only lives on paper will never drive execution. The real engine of a plan is a clear set of Key Performance Indicators (KPIs) and well‑documented assumptions. Together they give investors, partners, and your own team a way to measure progress, spot risks early, and keep every milestone on schedule.

1️⃣ Define Your Milestones First

Milestones are the high‑level objectives that signal you’re moving forward. They should be time‑boxed and tied to deliverables.

• Prototype completion – Month 3
• Beta launch & user testing – Month 6
• First paid customer – Month 9
• Break‑even point – Month 18

When you write each milestone, ask: What KPI will prove we’ve hit it? and What assumption underpins its success?

2️⃣ Core KPIs Every Startup Should Track

Below is a short list of universal metrics that apply to almost any early‑stage company.

• Monthly Recurring Revenue (MRR) – measures revenue growth for subscription models.
• Customer Acquisition Cost (CAC) – total sales & marketing spend divided by new customers.
• Customer Lifetime Value (CLV) – predicts long‑term profit per customer.
• Churn Rate – percentage of customers lost each month.
• Burn Rate – cash outflow per month; essential for runway calculations.
• Gross Margin – revenue minus cost of goods sold, expressed as a percentage.

Track these KPIs on a weekly or monthly dashboard. Our Financial Dashboard Excel template makes it easy to visualise trends.

3️⃣ Common Assumptions & How to Test Them

Assumptions are the hypotheses you’re betting on. List them, assign a risk rating, and build a test plan.

• Market Size – assume a total addressable market of $X M. Validate with surveys or industry reports.
• Conversion Rate – assume 5% of website visitors become paying customers. Run A/B tests to confirm.
• Pricing Sensitivity – assume customers will pay $Y per month. Use price‑testing tools before finalising.
• Supply Chain Reliability – assume a 2‑day lead time from supplier. Conduct a pilot order to verify.

Document each assumption in a separate column of your plan and revisit it every quarter.

4️⃣ Industry‑Specific KPI Examples

While the core set above is universal, each vertical has unique metrics worth adding.

SaaS Startup

• Daily Active Users (DAU) / Monthly Active Users (MAU) ratio
• Net Revenue Retention (NRR)

E‑commerce Store

• Average Order Value (AOV)
• Cart Abandonment Rate
• Repeat Purchase Rate

Physical Retail / Bar

• Sales per Square Foot
• Average Ticket Size
• Labor Cost Percentage

5️⃣ Quick Checklist – Build Your KPI & Assumption Matrix

Fill this table as you draft your plan. It becomes a living document that investors love to see.

6️⃣ Tools to Keep Your Metrics Fresh

• Use our Financial Statements Templates to build profit & loss, cash‑flow, and balance‑sheet projections.
• Track daily KPI snapshots with the Automated Excel Reporting add‑on.
• When you need a quick visual for investors, the One‑Page Executive Report does the trick.

Next Steps

Now that you know which KPIs to watch and which assumptions to test, the final piece is a solid, ready‑to‑use business plan template. Grab our free Business Plan Template and start populating the matrix above. When the numbers are in place, you’ll have a compelling story that convinces investors, aligns your team, and keeps you on track to growth.

Start building today and turn your vision into measurable results.