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← Remember that Time is MoneyI want to continue with the one of my most popular series on secrets to profitability. One of the secrets I’ve seen successful companies use to harness more profits is the sue of specific financial metrics.
Your business may be great at producing a product, great at satisfying customers, even great at keeping employees happy. But how good is it at making money? That’s the real question the implementation of the right financial metrics should answer. Focus on the right high-level and business-specific metrics that are tied into your company’s strategic plan, and you’re going to get closer to your financial goals (hopefully to be more profitable). Focus on the wrong metrics that are either outdated or not relevant for the size of your business and you could actually be harming your progress.
Given the unique nature of every business and how financial and performance metrics must be tailored to the business’s situation for success, I won’t outline good and bad metrics in this post. I will, however, discuss some key benefits that your metrics should provide and provide some very basic metrics that all companies should use—these are in no way an exhaustive list. Your company should have a handful of financial metrics and a handful of performance metrics that it uses. We can help you select the right metrics your business should use, and the methods by which you can collect that information.
Some commons ratios that wise business managers commonly review include:
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