Business Lunch Defining the Health of Your Business
4 snips
Feb 26, 2026 They debate the single best indicator of a company’s health and why trend-based metrics beat one-off numbers. They compare NPS, revenue and profit per employee, and why each can mislead. They explain distributable cash and how to calculate it for buyers. They also weigh profitability-first strategies against growth-first approaches.
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Founder Question Sparked The Whole Discussion
- A founder asked Roland during office hours: what's the single best business health metric?
- Roland didn't have an immediate answer, which prompted deeper thinking about trend vs snapshot metrics.
Measure Health By Trends Not Snapshots
- Business health should be measured by trend-based metrics rather than single-point snapshots.
- Roland and Ryan favor multi-year measures like revenue/profit trends because snapshots (e.g., balance sheets) can be misleading.
Track Compound Annual Growth Rate Of Profit
- Track compound annual growth rate of profit (EBITDA or SDE) to see if profit is consistently compounding over years.
- Use percentage growth over multiple years to reveal sustainable performance rather than a single-year spike.
