Do you want to learn the secret to small business success? It’s not what you think.
In this video, we’ll unearth the real key to small business growth and success. So if you’re ready to take your business to the next level, keep watching.
Not sure what a balance sheet is. Are you confused about cash flow? You’re not alone. Many small business owners don’t have a background in finance, so it can be tough to stay on the top of their money.
It can also be hard to keep track of your small business finances, especially if you’re unfamiliar with all the jargon. That’s where this video comes in.
We’ll walk you through seven key financial metrics and KPIs that every small business should track. By monitoring these indicators, you’ll be able to make informed decisions about your business and insured success.
If you don’t know me, let me introduce myself. I’m Doug Barra, and I am passionate about ensuring the growth and survival of local small businesses like yours. As a local small business owner, you have to wear many hats. You’re the salesperson, the marketer, the accountant, and often, the janitor. It’s a lot to handle, and it can be tough to keep track of everything, especially your finances.
But tracking your financial progress is crucial to the success of your small business. After all, money is the lifeblood of any business. By monitoring key financial indicators, you’ll be able to make informed decisions about where to invest your resources and how to grow your business.
I know because I am the owner of a small local business, and I have been coaching the owners of small local businesses for over 16 years now.
So what are the key financial metrics and KPIs Small businesses should track?
1. The balance sheet. A balance sheet is a snapshot of your small business’s financial health at a specific point in time.
2. Cash flow. Cash flow is the movement of cash in and out of your small business.
3. Profit and loss. Profit and loss or p and l measures your small businesses profitability. It shows how much profit or loss your company has made over a specific period of time.
4. The Gross Margin. The gross margin measures how much money your small business earns from its sales minus the cost of goods that it’s sold.
5. The average sale amount. The average sale amount is the average amount each customer spends with your small business each time they buy.
Customer acquisition costs. Customer acquisition costs, or CAC is the amount you pay to buy new customers, and, yes, you do “buy” new customers.
6. Customer retention rate. The customer retention rate measures how many customers are returning to do business with your small business over a specific period of time.
7. The growth rate. The growth rate measures how much your small business is growing over a specific period of time.
It can be tough to keep track of everything, especially your finances, but tracking your financial progress is crucial to the success of your small business. After all, money is the lifeblood of any business. By monitoring key financial indicators, you’ll be able to make informed decisions about where to invest your resources and how to grow your business.
I’ve seen firsthand how tracking key financial indicators can make or break a small business. For example, you could run into serious trouble if you’re not tracking your cash flow. Cash flow is the movement of cash in and out of your business. Therefore, it’s essential to know this metric to keep tabs on your cash reserves and ensure you’re not running out of money.
You could also be in for a rude awakening if you’re not tracking your customer acquisition costs. If you spend more to buy a customer than you make from having that customer, this is a problem!
Of course, on the other hand, if you know how much a customer brings your business over their lifetime, you can spend more to buy them, as my mentor Dan Kennedy says; “He who spends the most to acquire a customer wins!”
Not tracking your small Business’s growth rate is also a recipe for disaster. The growth rate measures how much your small business is growing, growing over a specific period of time. This is important to track to grow your small business.
These are just a few examples of why tracking key financial indicators is essential for small businesses.
You can make informed decisions about where to invest your resources and how to grow your business by monitoring these metrics. That’s what small business is all about.
You can use this information to make informed decisions about your business by understanding how each metric impacts overall financial health. For example, if your small business is experience a decline in sale, you might want to investigate what’s causing this trend.
Or, if your gross margin is decreasing, you might want to consider raising your prices to increase your profits.
By tracking these financial indicators, you can ensure your business is healthy and growing. And that’s essential for the success of any small business!
You can use the information in this video to make informed decisions about your business. By understanding how each metric impacts your overall financial health, you can ensure that your business is healthy and growing. This is essential for the success of any small business!
When it comes to small business success, we could all use a little help from our friends.
That’s why I’m inviting you to share your experiences in the comments to help each other succeed.
I know firsthand how tough it can be to start and run a small business.
But by sharing our experiences and helping each other out, we can make things a little bit easier.
So please share your stories, tips, and advice in the comments below. We could all use the help!
Would you like to learn more about financial metrics or other topics regarding business success?
Great! Then there are a few things that you need to do right now.
First, like this video, so I know that you got value, and I’ll make more videos like this one.
Second, subscribe to this channel, and click the bell to get notified whenever we post a new video so that you don’t miss a single piece of the valuable information we share.
And last, click the link in the description to register for the next live web class we hold on Thursdays and unearth the secrets to scaling your business!
This is a tremendous opportunity to go even deeper into these ideas!
I’m Doug Barra, and I’m passionate about small businesses succeeding.
Thank you for watching. I’ll see you in our next video.