The 12 Numbers Every Business Owner Should Know

What are the 12 numbers every owner should know?

Twelve numbers show whether a company is healthy. They cover getting customers and keeping them. They also cover moving money and running the engine. We call them the Vital Signs.

Each has one line on what it tells you and one question to ask your team. Ask for the number, the source and how long it took to get.

Getting customers

1. New leads a month. Tells you if demand is growing. Ask: “How many new buyers raised a hand last month, and where did they come from?”

2. Close rate. Tells you how well your team turns talk into orders. Divide won deals by quoted deals for the same period. Ask: “Of the quotes we sent in the last 90 days, how many became orders?”

3. Cost to get a customer. Tells you what one new customer costs. Add marketing spend and sales payroll, then divide by new customers. Ask: “What did we spend to win customers last quarter, and how many did we win?”

Keeping customers

4. Average order. Tells you what a normal sale is worth. Revenue divided by orders. Ask: “What is our average order, and has it moved in six months?”

5. Lifetime gross profit per customer. Tells you what a customer is worth after the cost of what you sold. Take gross profit per order. Multiply by orders a year. Multiply again by years they stay. Ask: “What does a typical customer earn us in gross profit over their whole time with us?”

6. Customers who went quiet. Tells you who left without telling you. Find customers with no order in longer than 1.5 times their usual gap between orders. Ask: “Who stopped ordering on their own schedule, and has anyone called them?”

7. Top customer share. Tells you how much of the business rides on one account. Divide your largest customer’s revenue by total revenue. Check the top five too. Ask: “What share of revenue is our top customer, and what share of past-due AR?”

Money

8. Gross margin. Tells you what you keep after the cost of what you sold. Revenue minus cost of goods, divided by revenue. Cut it by month, customer and product. Ask: “Which customers and products carry the lowest margin?”

9. Net profit. Tells you what is left at the end. Net income divided by revenue. Ask: “What was net profit last month, and who confirmed it?”

10. Days to get paid. Tells you how long your cash sits in other people’s pockets. Divide your AR balance by revenue, then multiply by days in the period. Ask: “How many days does it take us to collect, and who is over 60?”

The engine

11. On time and in full. Tells you if orders ship right. Count orders shipped complete by the promise date, then divide by all orders. Ask: “What share of orders shipped complete and on time last month?”

12. Owner hours in the weeds. Tells you how much of your week goes to chasing numbers and fixing things. Nobody tracks it. Ask yourself: “How many hours last week did I spend on reports, approvals and firefighting?”

Some companies swap one engine number for their own. A manufacturer might use inventory turns. A distributor might use fill rate. A contractor might use job cost against bid. Keep the count at twelve.

What is my score?

Your score is how many of the 12 you can get in under an hour and trust. Count only the ones you would stake a decision on.

Use this for each number:

1. Do I know it today?
2. How long would it take to get it?
3. Do I trust it?

Three yeses and an answer in under an hour score one point. Add them up.

Owners tell us: “I cannot get a single trusted picture of the business without chasing five people.” Your score puts a number on that sentence.

What do I do with a low score?

Fix the numbers that cross two tools first. Close rate, customers who went quiet and gross margin by customer all need sales history joined to something else.

1. Start with the point you scored zero on.
2. Name one owner for it.
3. Write its definition on one page.
4. Pick the review day, weekly or monthly.

Wiring comes next. See how to see all your data in one place. For the money side, 10 places cash hides in your data turns three of these numbers into questions you can ask this week.

If you want these twelve live on one screen, the Business Brain builds them. A pen, the template above and your own team are enough to start.