Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners. These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.
In the world of sports, a score is kept to monitor whether a team is winning or losing. In business, what are you using to determine whether your business is winning or losing? My name is Michael Barbarita from Next Step CFO providing outsourced CFO Services with your know your numbers minute. They’re called Key Performance Indicators, and they’re the scoreboard of your business. KPIs as they’re sometimes called are financial parameters that evaluate the performance and productivity of your business. One simple example is gross profit margin percent. This is an essential number for you to know and it is simply your gross profit divided by your sales. How do you know if this number is good or bad? It’s called bench marking, where you need to find the industry averages. One source I use to find industry averages is bizminer.com. Remember, the most successful business owners know their numbers!