This month, let’s focus on the top three numbers you need to be all over every single month.

I want to cut through the noise and give you the three numbers that I believe you should focus on each month in order to really understand if your business is performing in line with your expectations and if there is any trouble on the horizon. So, let’s get started.

1. Cash Gap

If you don’t understand what your cash gap is, check out episode 66. But essentially, your cash gap helps you understand if your working capital cycle is working the way it needs to be. If your business is growing and you have slippage in your working capital cycle, causing that cash gap to get bigger and bigger, you are going to have a very painful time when it comes to cash. You have to be able to manage your cash position really well. Your cash gap is a really good holistic number to help you understand if your debtors days, creditors days, stock days, and work-in-progress days are slipping.

2. Gross Profit Per Full-Time Employee

If you have a mixture of part-timers and full-timers, work that out to be your full-time equivalent. Take your gross profit and divide it by your full-time equivalents. This is a great efficiency metric. It will help you understand if you are becoming less efficient as a business as you grow your company and bring more people on. If that number slips outside of an acceptable range, then you know you are either under-resourced or over-resourced.

3. Net Margin

It’s a boring one but an important one. It’s probably one that you are looking at at the moment, but it’s very important to ensure that you have an understanding of what range of acceptability that net margin should be in. It’s a really good indicator of whether your overheads as a percentage of turnover are slipping, whether your gross margin is slipping, and whether you aren’t where you need to be potentially on your revenue.

So, there you go, three simple numbers that should give you an overall picture of how your business is performing cash-wise, efficiency-wise, and profitability-wise.

Ready to take your business to the next level? Discover how my tailored business coaching services can transform your strategy and drive success. For more insights and guidance from me, your expert business coach, visit my homepage. And don’t forget to check out my MYOB section for free business advice that can help you stay ahead in the competitive business world.