{"id":73957,"date":"2020-05-03t12:10:43","date_gmt":"2020-05-03t16:10:43","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=73957"},"modified":"2020-06-18t10:08:43","modified_gmt":"2020-06-18t14:08:43","slug":"growing-any-business-4-key-financial-metrics","status":"publish","type":"post","link":"\/\/www.g005e.com\/2020\/05\/03\/growing-any-business-4-key-financial-metrics\/","title":{"rendered":"four key financial metrics for growing any business"},"content":{"rendered":"
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4 key metrics for business owners
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what’s in the pipeline?<\/strong><\/p>\n

by jody grunden<\/i><\/p>\n

having a solid understanding of their finances can make a huge difference for business owners. not only does it help business owners make decisions about when it\u2019s time to hire a new employee or whether or not to invest in new equipment, but it also enables them to sleep better at night!<\/p>\n

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as a business grows, there are a few metrics business owners need to understand and review on a regular basis. when we work with growing businesses through our virtual cfo service, we help them focus on the following key metrics:
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  1. money in the bank:<\/strong> we recommend for any business, no matter what size, that you maintain at least 10 percent of your annualized revenue in the bank at all times. for example, a $3 million company should have about $300,000 in the bank account at any given time. this practice is extremely important for businesses as it prevents small issues from becoming big issues, and it reduces the impact of big issues. if you don\u2019t have that 10 percent in the bank, make that a goal for your company. keep in mind that in addition to that 10 percent, you\u2019re going to want to set aside your tax reserve. for simplicity\u2019s sake, we recommend setting aside 40 percent of the net income on a regular basis.<\/li>\n
  2. production metrics:<\/strong> production metrics will differ depending on your type of business. we typically work with service-based companies, where everything is based on time, and for this type of business, we look at the utilization rate, average bill rate, effective rate, and effective cost.<\/li>\n<\/ol>\n