Measure what matters.
Most businesses focus on metrics that don’t move them toward their 1, 3 and 5-year goals. Here are the top 5 financial KPIs that every business must track:
- Revenue
- Gross profit margin
- Net profit margin / EBITDA
- Cash flow
- AR Turnover
What are your top 5 financial metrics? Do any of these fall on the list?
Case study:
Starting a business has many different challenges. There are many things to monitor and cash flow is always at the top of the list. It is critical to have an understanding of your business’s cash flow cycle and timing.
One of the startups that we work with was having issues managing cash flow and found that they were constantly seeking financial injection from its founders and investors to cover operational expenses. When our team came on board we helped them prioritize where they should be spending their money and understand the cash cycle of their business. In this case, they had a large amount of receivables outstanding that were not being collected or followed up on.
Gaining a clear understanding of the cash cycle and prioritizing spending has helped this business operate without additional funding and has allowed them to grow year-over-year for the last 2 years.
Please reach out if we can help.