Business owner must know these numbers to have real control over the direction and performance of their business. Without them, decisions are often based on gut feeling rather than hard facts. This can lead to wasted opportunities, missed warning signs, and unnecessary stress. Numbers do not lie, and understanding them gives you the clarity and confidence to lead with purpose.
Most business owners I work with have an incredible work ethic and a strong vision. Yet when I ask for these seven numbers, I often get a nervous laugh or a vague answer. It is not because they are careless. It is because no one has shown them how these numbers tell the story of their business health. Let’s break them down.
1. Revenue
Revenue is the total amount of income generated from your sales before expenses are deducted. While obvious on the surface, the detail lies in tracking trends. Are you growing month on month? Which products or services are performing best? A business owner must know their revenue patterns so they can anticipate slow periods and prepare strategies for them.
2. Gross Profit Margin
Gross profit margin shows the percentage of sales revenue left after deducting the cost of goods sold. This is your first indicator of profitability. Too low, and it means your pricing, supplier costs, or efficiency need attention. A business owner must know this margin because even a small improvement can have a huge impact on bottom-line profit.
3. Net Profit
Net profit is what is left after all expenses, including wages, rent, and taxes, are deducted. It is your ultimate measure of profitability. I often see business owners focusing only on revenue growth while net profit stagnates or drops. A business owner must know their net profit to see the true picture of financial health.
4. Break-Even Point
Your break-even point is the sales volume required to cover all costs. It is the safety line between profit and loss. A business owner must know this number to make informed decisions about pricing, budgeting, and sales targets. When you know the break-even, you can assess new opportunities without guessing.
5. Cash Flow
Cash flow measures the movement of money in and out of your business. Even profitable businesses fail if cash flow dries up. A business owner must know their cash flow position to plan for upcoming expenses, manage debt, and ensure there is always enough on hand to keep the business running smoothly.
6. Customer Acquisition Cost (CAC)
CAC is the total cost of acquiring a new customer, including marketing and sales expenses. A business owner must know this figure to determine whether marketing campaigns are paying off. If your CAC is too high, you either need to adjust your strategy or focus on customer retention.
7. Lifetime Value of a Customer (LTV)
LTV estimates the total revenue a customer will generate during their relationship with your business. A business owner must know their LTV to make better marketing and customer service decisions. Increasing LTV often costs less than finding new customers and delivers greater returns.
Why These Numbers Matter Together
Individually, each of these numbers is useful. Together, they give you a full, accurate picture of your business. Think of them as the dashboard in your car. Ignore the fuel gauge or temperature warning light, and you risk breaking down. A business owner must know all seven to navigate safely and seize opportunities with confidence.
Real-Life Coaching Example
A client in the construction industry came to me frustrated. He was working long hours, yet his bank balance seemed to tell a different story from his workload. We started by tracking these seven numbers.
Within weeks, it became clear that his gross profit margin was lower than industry benchmarks. His pricing had not been adjusted for rising material costs in over two years. Once we increased his prices and renegotiated with suppliers, his net profit improved noticeably.
We also discovered his cash flow was suffering because payment terms with clients were too generous. By tightening payment conditions and implementing a staged payment structure, the cash position became stable. He now checks his numbers every month. As he says, “I feel in control for the first time in years.”
How to Start Tracking
You do not need complicated software to start. A simple spreadsheet will do, but make sure it is updated regularly. Most accounting platforms can produce reports for these numbers with a few clicks. Schedule time each month to review them.
Here is the process I recommend:
- Collect the data – Pull reports from your accounting system.
- Review the trends – Compare month-on-month and year-on-year.
- Identify issues – Look for declines, spikes, or unexpected changes.
- Take action – Adjust strategies based on what the numbers are telling you.
A business owner must know that the habit of reviewing these figures is as important as the figures themselves.
Common Mistakes to Avoid
Here is what I usually see when someone starts tracking numbers:
- They focus only on revenue and ignore profit margins.
- They do not separate one-off income from recurring sales, leading to misleading trends.
- They track but do not act, which defeats the purpose.
A business owner must know that tracking without action is like having a map but never leaving the driveway.
Building a Culture of Awareness
If you have a team, share relevant numbers with them. This builds ownership and accountability. For example, letting your sales team see progress toward revenue targets keeps them motivated. Your operations team should understand gross profit margins so they can help improve efficiency.
A business owner must know that numbers are not just for accountants. They are tools for everyone in the business to make better decisions.
The Payoff
When you know and understand these seven numbers, you make faster, better decisions. You spot problems before they grow. You see opportunities clearly. You build a more profitable, stable, and valuable business.
If you are unsure where to start, book a discovery call. We can review your current numbers together and create a practical plan for tracking and improving them.
Discovery Call: Book Here
Contact: Get in Touch | 0403 881 105 | info@businesscoachmark.com.au
