Financial Metrics Every Business Owner Should Track

Revenue is a vanity metric. It tells you how big your business is, not how healthy it is. I've seen companies doing $10M in revenue that are less profitable than $2M businesses. Here are the financial metrics that actually matter — and that every business owner should review monthly.

**Gross Profit Margin.** Revenue minus direct costs, divided by revenue. This tells you how efficiently you deliver your product or service. Benchmark: aim for 50%+ in services, 30%+ in product businesses. **Customer Acquisition Cost (CAC).** Total sales and marketing spend divided by new customers acquired. If your CAC is rising faster than your revenue per customer, you have a growth problem. **Cash Conversion Cycle.** How long it takes to turn a dollar invested back into a dollar in the bank. The shorter, the better. **Revenue per Employee.** Total revenue divided by headcount. This tells you how efficient your organization is and when you're overstaffed or understaffed. **Monthly Recurring Revenue (MRR).** For subscription or retainer businesses, MRR is your foundation. Track it, trend it, protect it.