Three Financial Metrics Your Customers Must Follow
February 4, 2013
Excellent article in this month’s Inc magazine about three metrics your small business loan customers must follow to ensure their financial success
Start a reserve fund.
Focus on margins, not just sales.
Sales only matter if they are healthy sales. A company that sells $100,000 worth of merchandise on which it makes 10% profit is a much healthier company than one that sells $100,000 on which it makes 5% profit. Yet the owners of both companies, if they rely only on sales figures, would seem to be equally successful. If I do not watch the margins carefully, my company will not continue well because the money to increase product lines and provide top-notch service will dry up. If you focus more on maintaining and improving margins, you’ll improve your company’s stability, and guarantee you’ll be able to stick around long-term.