Starting Smart: 3 Crucial Numbers for New Entrepreneurs

Tracking your business metrics helps determine if you're on the right track or drifting without direction.

Midjourney image created by the author.

I'm as much of a numbers girl as I am a systems girl. I went to college for accounting and worked in the mortgage industry and wholesale accounting before starting my business.

I love the way numbers tell the story. But as a non-number person, they can get overwhelmed quickly.

This is why I will share the three things you should be tracking in your business: new or seasoned.

Profit Margin

Monitoring your cash flow is one of the first things you are taught in Business Accounting 101. Money coming in, income. Money going out, expenses. The difference is profit.

Three standard accounting reports are your P&L (Income Statement), Balance Sheet (snapshot), and Cash Flow (entering and leaving).

While all three of these are essential, one number we often overlook is the profit margin—the difference between the total cost to run your business and its total revenue.

The higher the number, the more money you keep.

Say you want to bring home more money each month but need the gumption to add another income source. Look at the profit margin.