Hey! To help you get your questions answered quickly, I created this new mini-post series about Squarespace and Biz tips. Blogs in the mini-series will be shorter and sometimes related to a Freebie to help you get some answers to your questions.
Someone reached out last week and asked which number should be tracked when you manage your business. Here are five critical financial numbers all businesses should know and track:
Sufficient cash flow in your business accounts is essential and should meet your business’s monthly expenses.
You’re not charging enough for your products if your gross margin doesn’t cover your monthly business expenses (rent, salaries, etc.).
Calculating your net income is the easiest way to determine if you’re making money. It would be best to calculate your net income every month to know where your business is heading.
Profit and Loss
The P&L statement shows your company’s income (sales and revenue) minus expenses during a specific period (I love to do monthly P&L). It will help you predict the success of your business and allow your company to grow gradually.
You must keep an eye on sales to react quickly if they dip so you can react and take action immediately and implement a strategy to re-adjust.
Do you track your financial numbers? Comment below; I’d love to know!
PS: Enrollment for The Business Factory, a 6-week online learning program with individual coaching sessions to help you build, launch and manage your online business, is now open! If you’re curious about this program and community, I invite you to message me so we can chat about it!