Running a tech start-up can be exciting, but it also brings many responsibilities. One of the biggest is keeping on top of your numbers. When you track the right financial metrics, you can make decisions that benefit both immediate growth and long-term sustainability. We understand that the 2025/26 tax year may already feel full of regulations and obligations, however, focusing on the details that matter will give you a clear picture of where your business is headed.

Below, we outline the core financial metrics every UK tech entrepreneur should monitor. We’ll explain what they mean, how to calculate them and why they’re important for attracting investors, scaling effectively and staying on course.

Revenue growth

Revenue is the total income your company generates, usually from product sales or subscription fees. Tracking revenue growth each quarter or year can show whether your product or service is gaining traction.

• Why it matters: If your revenue stays flat or drops, it might be time to adjust your pricing, marketing or product development. Consistent increases, on the other hand, can indicate a strong position when speaking with investors or applying for loans.
• How to calculate: Subtract the previous period’s revenue from the current period’s revenue, then divide by the previous period’s revenue, and multiply by 100 to get the percentage growth rate.
• Example consideration for 2025/26: If your revenue grew from £400,000 in the first quarter of 2025 to £500,000 in the second quarter of 2025, that’s a 25% growth rate, which could signal the potential to scale.

Burn rate and cash runway

For tech startups, burn rate – the rate at which you spend funds each month – is an essential metric to follow. It offers a straightforward view of how quickly your business is using up cash and, combined with your remaining funds, translates directly into your cash runway.

• Why it matters: If your monthly burn rate is high, your cash runway will shrink. Once you see a drop in runway, you might delay expansion plans or seek extra funding.
• How to calculate: Add up all your cash outflows for a given month (such as salaries, rent, software subscriptions), then compare it to the previous month’s figures. This monthly spend is your burn rate. If you have £120,000 in the bank and a monthly burn rate of £20,000, you have six months of runway.
• Practical tip: Keep an eye on the UK’s corporation tax thresholds. For instance, if your projected profits move above £50,000 and into the tapered rate brackets, your monthly burn could shift because of tax obligations.

Customer acquisition cost and lifetime value

Customer acquisition cost (CAC) and lifetime value (LTV) are often paired together to show how much you spend to bring on a new customer and the total revenue you can expect to earn from that customer over their lifetime.

• Why they matter: If your CAC is higher than your LTV, your business model may be on shaky ground. But if your LTV outweighs your CAC, you can invest in sales and marketing with more confidence.
• How to calculate CAC: Divide the total marketing and sales spend in a given period by the number of new customers gained during that period.
• How to calculate LTV: Take the average monthly spend per customer, multiply by the average customer lifespan in months, and then factor in your profit margin.
• Example: If it costs £50 to attract each new user and the average user stays for 12 months, spending £20 monthly at a 50% profit margin, your LTV is £120. This significantly exceeds the £50 CAC.

Gross margin

Gross margin is the difference between your revenue and direct costs (such as cost of goods sold, server hosting fees), expressed as a percentage of revenue. It shows how efficiently you create and deliver your product or service.

• Why it matters: A healthy gross margin offers more flexibility to invest in staff, product research and development (R&D) or marketing. If your direct costs rise faster than revenue, you could see a dip in profitability.
• How to calculate: (Total revenue – direct costs) ÷ total revenue × 100.
• 2025/26 considerations: Keep an eye on changing supplier costs or wage demands that might affect direct costs. Our partners often review monthly statements to catch spikes early.

EBITDA

EBITDA stands for earnings before interest, taxes, depreciation and amortisation. Many investors use it to assess a business’s operating performance without certain accounting or financing factors.

• Why it matters: It strips out expenses that can differ widely between companies, giving a fairer overview of how profitable your core operations are. A higher EBITDA ratio means your tech startup is generating strong returns from operations.
• How to calculate: Start with net profit, then add back interest, taxes, depreciation and amortisation.
• Strategy tip: Knowing your EBITDA helps you see how potential changes in interest rates or increases in the corporation tax rate could affect your overall performance. For more details on business registration and data filings, visit Companies House.

Why these metrics matter for investment, scaling and sustainability

Investors often ask about revenue growth, burn rate, CAC, LTV, gross margin and EBITDA. These figures can show if your business model is viable and whether you’ve identified a genuine market need. If your revenue is rising and your gross margin remains steady, you can feel more comfortable about scaling. If your CAC is too high or your burn rate is climbing, you may need to rethink your strategies before looking for further investment.

When you track these metrics month to month, you’ll also notice any red flags – for example, if your LTV suddenly drops or your gross margin plummets. This prompt awareness can help you correct course sooner rather than later.

Practical steps to track your metrics effectively

1. Set up regular reporting: Establish monthly or quarterly reporting cycles. We often recommend cloud-based accounting tools that provide real-time insights.
2. Seek professional advice: If you’re not sure which metrics are most important for your specific tech service, it may help to talk to an accounting professional. Our team at Richardsons can tailor your reporting and offer guidance.
3. Review and adjust: Financial metrics should not be static. Business environments shift, especially in tech. Consider adjusting your targets each quarter to match your product roadmap and funding status.
4. Check your regulatory position: Some financial metrics, like your burn rate, can change if you cross certain corporation tax thresholds. A quick chat with us can clarify your position under the 2025/26 rules.

Looking ahead

We understand that tech founders face constant pressure to deliver product updates, manage teams and stay in touch with investors. However, consistent attention to these key financial metrics can help you focus on what really matters: building a sustainable operation that supports future growth. Even if spreadsheets aren’t your favourite pastime, you’ll gain peace of mind by knowing exactly where your company stands.

If you’re ready to improve your financial reporting or want expert advice on any of these metrics, we’re here to help. Let’s arrange a quick call and discuss how our partners can support your tech startup as it grows.