Running a small or medium-sized business isn’t just about working hard—it’s about working smart. And the smartest way to do that? Tracking the right numbers.
Too many business owners get caught up in the day-to-day hustle and forget to check if they’re actually making money, growing, or heading for trouble.
The good news? You don’t need an MBA or fancy dashboards to track what matters. Focus on these five simple but powerful business metrics to stay profitable, grow, and make better decisions.
1️. Profit (Not Just Revenue!) – The Money That Stays in Your Pocket
A business can make millions in sales and still be broke. That’s why the most important number to track isn’t revenue—it’s profit.
How to track it:
- Gross Profit = Revenue – Cost of Goods Sold (COGS) → This tells you if you’re making enough per sale.
- Net Profit = Revenue – All Expenses → This is the real number that matters.
📊 Why it’s important:
If your net profit is low, you might need to raise prices, cut costs, or improve efficiency before things get worse.
👉 Pro tip: Check your profit margin (%) each month to see if it’s shrinking. If so, dig into what’s eating your profits!
2️. Cash Flow – Can You Pay Your Bills?
Your business can be profitable on paper but run out of cash—and that’s how many small businesses fail.
How to track it:
- Cash In – Cash Out = Net Cash Flow
- Look at it weekly or monthly to make sure you have enough to cover wages, rent, and expenses.
📊 Why it’s important:
A growing business can still run out of cash if customers pay late or expenses grow faster than revenue.
👉 Pro tip: If you struggle with cash flow, shorten payment terms or offer incentives for early payments.
3️. Customer Acquisition Cost (CAC) – How Much Are You Paying for Each New Customer?
Marketing isn’t free. You’re spending time, money, or both to get new customers. But are they worth it?
How to track it:
- CAC = Total Sales & Marketing Costs ÷ Number of New Customers
- Example: If you spent $5,000 on ads and got 50 customers, your CAC = $100 per customer.
📊 Why it’s important:
If your CAC is too high, you’re spending more to get customers than they’re worth.
👉 Pro tip: Compare CAC to Customer Lifetime Value (LTV). If it costs you $100 to get a customer but they spend $1,000 over time, that’s a good deal!
4️. Repeat Customer Rate – Do People Come Back?
It’s cheaper to keep a customer than find a new one, but many business owners focus too much on new sales and ignore existing customers.
How to track it:
- Repeat Customer Rate = (Returning Customers ÷ Total Customers) x 100
- If 50 out of 200 customers return, your repeat customer rate is 25%.
📊 Why it’s important:
A low repeat rate means you’re losing customers and need to improve service, quality, or follow-ups.
👉 Pro tip: Use email or SMS follow-ups to remind past customers to come back!
5️. Employee Productivity – Are You Getting the Most Out of Your Team?
Your team is your biggest asset AND biggest expense. If productivity is low, your business will struggle.
How to track it:
- Revenue Per Employee = Total Revenue ÷ Number of Employees
- Tasks Completed Per Employee Per Week/Month
📊 Why it’s important:
If productivity drops, it might mean overstaffing, unclear roles, or burnout.
👉 Pro tip: Regular check-ins and performance reviews help employees stay motivated and improve results.
Final Thoughts
📌 Tracking business metrics isn’t about spreadsheets—it’s about knowing what’s working and fixing what’s not.
Start with these five key numbers, check them monthly, and use them to grow smarter, not harder.