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7 Business Statistics Every Small Business Owner Should Know

As we begin a new year, it's a good time to analyze where you are and how that compares to where you want to be. Statistics are the single most effective tool for doing exactly that. Whether you're a veteran MBA or a first-year business owner, these seven numbers will give you a strong sense of how your company is performing. 

Small-business-statistics

  1. Return on Investment This is how much money you make compared to how much you spend for any business investment, expressed as a percentage. ROI= ($ Earned / $Spent) x 100. The higher the number, the better your employee, program or improvement. Run this not for your company, but for various investments to see which ones deserve the most energy.
  2. Marketing Conversion Rate You can't tell exactly how many eyes see your marketing message, but you do know how much you're spending. Divide that by the number of customer contacts you get from any given marketing endeavor to know how much each contact costs you. Use it to know which initiatives are working the best.
  3. Sales Conversion Rate This is the number of sales you make divided by the number of customer inquiries you receive. It's most useful when you run it at different levels -- such as for initial calls, for first-time visits to your shop and for engaged sales conversations. By comparing the different levels, you can tell where your sales process has the most room for improvement.
  4. Previous Performance Comparison A less complex formula, this statistics helps you gauge your progress and make predictions for coming weeks. It's a matter of comparing your performance in one week with the corresponding week from previous years. As the year progresses, it provides a reasonable gauge of how you can expect future weeks to go.
  5. Variable Expenses The only basic statistic on this list, it's here because of its importance to controlling your company's success. Variable expenses are those that change from month to month, such as utility bills and supply costs. Holding them down is literally free profit.
  6. Daily Acts of Promotion You won't find this in many marketing textbooks, but it's a great way to measure one of your most important jobs as a business owner. Simply count how many times per day you make a significant contact with a potential new client. Handing out a business card or calling to "check in" are two examples. Set goals and hold contests between your marketing team.
  7. Net Margin This one is worth knowing daily, but takes a little preparation to be useful. Figure out how much your regular expenses like payroll and utilities cost each day, then add any costs unique to that day. Subtract it from how much cash came in. That lets you know whether you made money or lost money for your efforts. Businesses with a longer-term cash cycle can do this weekly, monthly, or however often their flow makes the most sense.

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