Running a small business can be an intensely stimulating and enjoyable experience. But it all counts for nought if the business isn’t making a profit.

A surprisingly large number of small business owners don’t know the true state of their company’s finances. Here are seven indictors you should be across if you want to understand the true financial position of your small business.

Profit margin

Your small business can improve its profit margins by cutting costs, raising prices or both.

Break-even point

This is the number of sales you need to make to move from loss to profit.

Knowing your break-even point allows you to determine where your small business should spend its money.

Repeat purchases

Repeat customers are good, for two reasons. First, they show your small business is doing something right. Second, it’s cheaper and easier to win business from old customers than new customers.

So you should try to think of marketing strategies that get your old customers to reengage.

Customer acquisition costs

Do you know how much your small business is spending for each paying customer?

You need to know this number and work out ways to improve it. For example, digital marketing might be one way to reduce your customer acquisition costs.


Do you know how many customers are the result of referrals?

Again, find out this number and try to improve it, because more referrals equals more sales equals more profits.


Your small business needs to know how many leads it’s generating from its marketing activities. And it needs to know how many of these leads are being converted into sales.

Increasing your conversion rate by 10% can significantly improve your bottom line, without increasing your marketing spend or lead flow.

Transaction size

Similarly, if you can get each customer to increase their average order by 10%, you can significantly improve your bottom line without increasing your customer base.

Again, marketing can help.

Need help with your marketing? Speak to small business marketing experts Hunter & Scribe on [email protected].