It's cliché, but true: You can't manage what you don't measure. If you want to grow your business, therefore, it stands to reason that you first have to quantify its performance. A good way to do that is with financial metrics, according to Quickbooks Resource Center contributor Barry Moltz.
"Most owners do a lousy job of reviewing the information they could easily find in financial reports from their accounting system. In most cases, they either fail to look at them regularly or simply don't understand what the numbers mean," Moltz says. "These numbers, however, are a very powerful and essential tool for managing any business. Without knowing how a company has performed financially, it is impossible to predict where it can go."
In addition to obvious metrics like revenue, Moltz recommends looking at measures like sales close ratio.
"It is critical to know the business' sales process close ratio, which you get from dividing the number of sales proposals you make by the number of sales you ultimately close. Of all the prospects the company writes proposals for, how many do they win?" he continues. "This is a key number, which should not be too low or too high. If it is too high, the company is not talking to enough prospects or its prices are too low. If it is below 30 percent, sales reps may not be qualifying their prospects enough before spending valuable time preparing proposals."More Tips:http://quickbooks.intuit.com/r/financial-management/5-important-business-numbers-you-need-to-knowQuestions, Comments, Suggestions?Contact Successful Meetings Editor in Chief Vincent Alonzo with your "How To" ideas.