3 essential key numbers every entrepreneur should track
Processing business is not simple to handle for entrepreneur. In particular, dealing with numbers in business is too overwhelming. Every business owner might think, “If I don’t know the numbers in my business, that’s not a problem because I can’t see them.” However, those numbers are still there.
However, handling numbers can be easy with three key number, you really need to track in your business in order to grow a successful business.
What you track grows.
There is no business without sales. Sales are the livelihood of your business.
Start tracking your sales at least once a month. Break it into your top three products or services.
Make sure to line items on your profit-loss statement. That way you will be clear on how your offerings are performing. Also, track the drivers that affect sales. Create an Excel doc to track the drivers of your sales. Do this every week. Make it a game. Remember, what you track grows!
There is not as much of possibility that business can last if it doesn’t make money. Making profit is on top of list for growing victorious business.
Some business owners pay themselves a salary that is part of their expenses. But if you just take a draw from your business, this won’t show up on your profit loss statement. This will make sure you have a clear picture of your profit margin.
Shoot for a profit margin of 10%. Aiming for a 10% or higher profit margin will force you to keep your spending in check.
Cash is emperor. Figure it out! Cash flow means everything to business owners.
How much money you have at the beginning of the period?
How much money you have at the end of the period?
What happened to the difference?
Ask your bookkeeper to track these tactics for you and find it in your cash flow statements. At least keep two months’ of business expenses in your business account. If that seems like a stretch, start with one month.