Bob Gauvreau breaks down the KPIs a $1M+ business owner needs to check weekly: gross profit margin, weekly revenue targets, overhead and payroll, break-even point, and cash flow. He warns against using only historical data, pushing instead for forward-looking forecasts to guide decisions.
Chapters
So if you're a business owner and you're thinking, what metrics do I need to track every single week? For sure, gross profit margin. What you wanna know is over a period of time leading up to this week, what has my gross profit margin been? We wanna make sure over a period of time, gross profit margin is constantly going up. If it's dropping, that means our costs are exceeding the price that we have set, and we're just gonna be losing money over a period of time. Revenue weekly, you know, such an easy target to set. If I hit that target every single week, what does that accomplish for my business throughout the year? That's a big one. Understanding what your costs are. What's my overhead costs every single week? We have payroll costs that are either weekly, biweekly, bimonthly, monthly. We want to be tracking those. We have to understand what our break-even point is. What's the revenue we have to hit this week in order to make sure that we're profiting in our business? These are some key metrics related to profitability. The other one is cash flow. So just because you've got profitability doesn't mean that you have cash flow. So I would be monitoring every single week, what is your cash flow? Where's your cash in? What's your cash out? And also what's going to happen in the next week? Are you going to collect your accounts receivable? Do you have to make your payables? Do you have a credit card bill due? Do you have a loan payment due? So understanding not just what happened over this week, but what's going to happen next, right? One thing that business owners do is they constantly focus on the historical information in their business. Historical information in their business is important. It gives you a benchmark. It lets you understand the history of what's happened in your business. But projecting forward, creating benchmarks, forecasts, understanding where you're going, those are gonna be the key numbers that you wanna be monitoring in your business.
