Most small business owners work hard every day, but still feel unsure about their business performance. The reason is simple. The numbers are there, but there’s no clarity.
You don’t need complicated dashboards to get clarity. You only need to track a few important numbers consistently.
Below are five numbers every small business should track every month if they want better control and better decision making.
This is the most common number people track, and it’s a good starting point.
It helps you understand if sales are growing or falling, and whether you are improving month by month.
One important thing to remember is that sales alone does not mean your business is healthy. A business can have high sales and still be running in loss.
Gross Profit is what you earn after removing the direct cost of your product or service.
Gross Profit = Sales minus Cost of Goods or Cost of Service
For example, if you sold ₹1,00,000 and your product cost was ₹60,000, your gross profit would be ₹40,000.
This number tells you if your pricing is correct, if your product costs are increasing, and whether your margin is improving or shrinking over time.
If your gross profit is weak, it usually means you need to look at pricing, supplier costs, discounting, or wastage.
Net Profit is the real result number. It tells you how much money you actually keep after everything is paid.
Net Profit = Gross Profit minus all expenses such as rent, salary, marketing, delivery, and other costs.
This number shows whether your business model is working or not. If your sales are increasing but your net profit is not increasing, then something is leaking somewhere.
Profit is important, but cash is survival.
Many businesses fail not because they are unprofitable, but because payments are stuck, inventory is over bought, or expenses stay high.
Tracking cash in bank every month helps you understand if you can pay suppliers and salaries comfortably, and whether you are running short on cash even after good sales.
This simple habit can save you from sudden stress.
You don’t need to track fifty expenses in detail to understand your business. Just track your top three biggest expenses.
For most small businesses, this could be rent, salaries, ads and marketing, logistics and delivery, packaging, or software tools.
This tells you where most of your money is going, and which cost is increasing quietly in the background. Most profit problems are actually expense problems.
Every month, take thirty minutes and write down your total sales, gross profit, net profit, cash in bank, and your top three expenses.
If you track this for just three months, you’ll start seeing patterns clearly. And once you can see the patterns, decision making becomes much easier.
If you want a free review of your sales, expense, and profit data, message Known Axis on WhatsApp and we’ll guide you.