Be aware of and track your main financial indicators. The more you observe what the numbers are doing, the faster you’ll see what’s working and what isn’t so you can take immediate action. There are six main business measurements that will give you a regular snapshot of how your business is doing.
Number 1: Gross Margin
Gross margin is the difference between what you pay for a product and what you sell it for. Look to improve your gross margin by:
- Increasing your prices. Check the impact on possible demand (where price-sensitive customers might switch if they see the competition as cheaper).
- Running advanced cost modeling through ERP systems to identify material, freight, or labour inefficiencies across the supply chain.
- Conducting lean manufacturing audits to minimize production waste and defects.
- Launching ‘design to cost’ initiatives to engineer products more efficiently from the start.
- Reducing cost of goods sold (COGS) by using lower-cost components where possible, without affecting quality.
- Researching lower-cost providers. Alternatively, ask your current suppliers to reassess their pricing.
- Reducing waste. Conduct an exercise to spot excess waste and then devise ways to minimize. Recycle and reuse any waste materials you can.
Number 2: Average revenue per customer
This metric is about increasing the number of things customers buy from you. It can be products, hours, services, warranties, insurance; anything where a customer is encouraged to buy two things rather than one. Build average revenue by:
- Using the data from your accounting software or sales system to identify trends and plan promotions. Look at what your best customers are buying and promote them to new customers.
- Using customer journey analytics to create targeted campaigns based on behaviour and purchase history.• Bundling high-margin services or extended warranties with
products, especially in SaaS or retail. - Focussing on your ‘gold’ customers responsible for high, profitable sales. Target those with the most potential, and then develop a specific proactive plan for each.
- Building loyalty tiers with exclusive benefits to increase average spend per visit.
- Integrating AI-powered recommendation engines (like Salesforce Einstein or Adobe Sensei) to offer relevant upsells.
- Training client-facing teams to recognize cross-sell opportunities in consultative B2B settings.
Number 3: Revenue growth
Steady, predictable revenue growth is the sign of a healthy company. Grow revenue by:
- Acquiring complementary companies or product lines to expand reach.
- Entering new verticals or regions using detailed TAM (Total Addressable Market) studies.
- Investing in SEO/SEM, social commerce, and influencer partnerships to reach niche audiences.
- Leveraging partnerships with resellers, marketplaces, or white label service providers.
- Developing vertical SaaS or embedded finance models to grow revenue per customer.
- Developing new products or services for your existing customers.
- Creating a marketing plan to identify, locate and sell to new customers.
- Identifying new distribution channels to expand your customer base, such as third-party selling (Amazon, eBay, iTunes etc.), and your website.
- Using CRM software to help track leads, and to become more efficient in gaining new customers.
Number 4: Revenue per employee
Revenue per employee can be affected by several factors, including average revenue per user, your systems and processes, and your use of automation. This metric is often especially useful for those businesses that sell per hour. To encourage higher revenue per employee, try:
- Making sure your staff have the equipment and training they need to do the job right, and keeping them informed about business performance and management decisions — especially those that directly affect them.
- Implementing enterprise-grade automation in finance, HR, and supply chain (AI chatbots, or document processing).
- Enhancing digital training programs via an LMS to upskill your teams quickly.
- Streamlining internal processes with project management software (Monday.com, Asana, Jira).
- Aligning bonus structures to individual and team productivity goals (make sure your sales data is transparent).
Number 5: Net profit percentage
This is the margin that accrues from a business’ cumulative efforts, and is the ultimate measure of how a company is being operated. Increase your net profit percentage by:
- Using zero-based budgeting for departmental reviews and cost accountability.
- Installing smart building systems to lower utilities costs across office or warehouse locations.
- Consolidating vendor contracts or migrating to shared service centers.
- Outsourcing high-cost functions such as legal, HR compliance, or IT helpdesks.
- Managing working capital cycles tightly for faster receivables, optimized payables, and minimal inventory holding.
- Moving to a lower-cost premises if your location isn’t mission critical.
- Reviewing your equipment needs. It could be that you’re better off leasing equipment rather than buying it outright.
- Making sure you swiftly collect any money that’s owed to you.
Number 6: Customer satisfaction
Tracking customer satisfaction by asking for opinions, feedback, and ratings can provide invaluable indication of dissatisfaction (for remedying) and of potential advocacy (for marketing amplification). Anything that improves the communication between customers and the business should lead to better decision-making. Try:
- Deploying Net Promoter Score (NPS) tracking across all channels — such as email, phone, and chat.
- Investing in CX platforms like Zendesk, Qualtrics, or Medallia to centralize feedback.
- Monitoring review sites and social channels with sentiment analysis tools. Optimize your marketing budget and track campaign performance by connecting apps like Google Analytics, Facebook, LinkedIn, and X.
- Hosting customer advisory boards or VIP user communities to co create offerings.
- Automating surveys post-interaction, and building workflows to escalate any dissatisfied parties.
Next steps
Track and improve these six numbers using dashboards, monthly reports, and department-specific action plans. Assign ownership to key leaders, invest in the right technology, and make regular improvements to stay agile and competitive. Select the metric that aligns with your most pressing business challenge, build a baseline, and take measurable steps every month. Stronger numbers mean a better, more resilient business. Implement those actions that are relevant to your business to improve each number. The higher and better these can be, the stronger your business.
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This content is for general information purposes only. It is not to be relied upon as financial, tax, or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. You should consult your own professional advisor for specific financial, investment, and/or tax advice tailored to your needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.
