A healthy pulse is an important human vital sign. We believe the same could be said for a business.The issue is that these days there is so much data around that it can be quite daunting and we find that business owners:
- feel overwhelmed by the number of reports available
- don’t know how to interpret the reports available
- don’t run the right types of queries
So we thought it would be helpful to outline the best reports to keep on your radar to ensure that your business is functioning at its best. In short, failure in any of these 3 areas would be the fastest way for a business to fail.
3 quick and important business reports
- Profitability – how much you make per product sale
- Cash flow – how much money is in the bank compared to your debts and bills
- Sales Pipeline – tomorrow’s business
The impact of cash flow on a business
In the simplest terms, no sales means no cash in the door. No cash in the bank means no easy way to pay the bills. If bills are not being paid, you are not going to be able to:
- pay your staff
- purchase supplies to make your products
- purchase services needed to develop or sell your products
- pay the running costs of keeping the doors open
At which point you are either going to have to make a refinancing plan which has a whole load of other business implications or worst case, shut the shop.
Why you need to watch profitability
So while looking at the cash coming in and out, it is also important to keep a watchful eye on your profitability. This means that as you sell more and scale up, that the cost of production or delivering the product is not eating into the margin on the sale of your product. There could be a point where you really are not making any money on your sales, therefore your wasting all the effort you’re putting in.
How pipeline affects your business health
Your sales pipeline or funnel is literally the list of future sales. Ideally you would have a clear idea of how many people you need in each stage of the funnel in order to reach your sales targets. At any given time you should be able to run a report that indicates the actual numbers in each stage of your funnel. Then you need to measure reality against what your targets are. If the result is that you have too few people in the top or middle of the funnel, then you are going to run out of contacts to sell to. Your numbers just wont add up, your sales will run out and your cashflow will dry up.
So if your time is tight and you want to just watch the most critical information to keep your business running – then these 3 reports are your best bet to keep an eye on the overall health of your business. Download our guides below on how to prepare these reports.