The top 5 finance numbers

Five numbers every business owner should know off the top of their head:

1.   Money in the bank right now and how long it will last. What is the cash burn rate and how can you make it better?

2.   Revenue and how it’s trending, by product, service and customer. Overall revenue trends could be hiding over-reliance on one customer or a declining product or service.

3.   Gross margin, by product, service and customer. A healthy gross margin gives you the headroom to survive and helps growth.

4.   Customer acquisition cost (CAC) v Customer Lifetime Value (CLV). How much does it cost to win a customer, and how much will that customer earn you over time? Once the gap between CAC and CLV starts narrowing, you will start losing money.

5.   Breakeven point – what revenue do you need to cover your direct and indirect costs? Quickly understand roughly how much money you are or aren’t making each month.

A regular dashboard report setting out these metrics is a great way to stay on track and not lose control of growth.