5 numbers every owner should know

You don't need to watch every figure in your business. But a handful tell you almost everything about its health — and most owners never look at them.

Here are the five worth checking regularly. You don't need an accounting degree to understand them — just a few minutes each month.

The five to watch

• Cash in the bank — the simplest health check. Profit on paper means little if there's no cash to pay this week's bills.
• Revenue vs. profit — what comes in is not what you keep. Knowing the gap shows whether you're busy or actually making money.
• Gross margin — for every $100 you sell, how much is left after the direct costs of delivering it. It tells you if your pricing works.
• Money owed to you — unpaid invoices are cash stuck outside your business. The longer they sit, the more they hurt.
• Break-even point — the sales you need just to cover your costs. Everything above it is profit; everything below is a warning.

Make it a habit

Pick a regular time — say, the first Monday of each month — and look at these five. Patterns appear quickly, and small problems get caught while they're still small.