5 Scary Numbers Every Small Business Owner Should Check This Month
Most small business owners know their revenue by heart. But revenue alone can't tell you whether your business is actually healthy, and a busy month can hide a lot of problems. The numbers that tell the real story are the ones most of us avoid looking at. They feel scary because they might confirm something we already suspect. But a number you know is a problem you can fix. A number you avoid just keeps growing in the dark.
Photo by Bailey Riley Photo
1. PROFIT MARGIN
Your profit margin tells you how much of every dollar you bring in actually stays in the business. It's the difference between being busy and being profitable, and those are not the same thing.
How to calculate it: (Revenue minus expenses) divided by revenue, times 100.
Example: You brought in $12,000 last month and spent $9,000 running the business. That leaves $3,000, which is a 25% profit margin.
Why it's scary: Plenty of businesses grow their revenue every year while their margin quietly shrinks. More sales, more supplies, more software, more help, and somehow less left over.
If it's lower than you'd like:
Raise prices on your most popular product or service.
Cut or downgrade one recurring expense this month.
Look for your lowest-margin offer and decide whether it's worth keeping.
Healthy margins vary a lot by industry, so the most useful comparison is to yourself. Track it monthly and watch which direction it's moving.
2. CASH RUNWAY
Cash runway is how many months your business could keep running if no new money came in. It's the number that tells you whether a slow month is an inconvenience or an emergency.
How to calculate it: Cash in your business account divided by your average monthly expenses.
Example: You have $15,000 in the bank and spend about $5,000 a month. That's three months of runway.
Why it's scary: Many small businesses run on a few weeks of cash without realizing it. Then one late invoice, one slow season, or one surprise tax bill turns into panic.
If it's shorter than you'd like:
Open a separate savings account just for the business, so the cushion isn't sitting where it's easy to spend.
Move a set percentage of every payment into it automatically, even if it's 5%.
Plan now for January. If the holidays are your busy season, set aside part of that revenue before it disappears into the first quarter slump.
Many advisors suggest aiming for three to six months of runway. If you're nowhere near that, start with one month and build from there.
3. CUSTOMER ACQUISITION COST
Customer acquisition cost, or CAC, is what it costs you to bring in one new customer. It's how you find out whether your marketing is paying for itself.
How to calculate it: Total marketing spend for the month divided by the number of new customers that month. Include ads, event booths, sponsorships, printed materials, and any marketing help you pay for.
Example: You spent $600 on marketing and gained 12 new customers. Your CAC is $50.
Why it's scary: It's easy to spend money on marketing because it feels productive. Without this number, you have no idea whether that market booth or those Instagram ads actually brought anyone in.
To get a clearer picture:
Ask every new customer how they heard about you, at checkout, on your intake form, or in your booking software.
Track the answers in one simple spreadsheet so you can see which channels are working.
Put more money toward the channels bringing in customers, and pause the ones that aren't.
This number means the most when you compare it to the next one.
4. AVERAGE REVENUE PER CUSTOMER
This is how much the typical customer spends with you. On its own it's helpful. Next to your customer acquisition cost, it's eye-opening.
How to calculate it: Total revenue for the month divided by the number of customers who bought from you that month.
Example: You brought in $12,000 from 80 customers. Your average revenue per customer is $150.
Why it's scary: Here's where the numbers start talking to each other. A $50 acquisition cost against $150 in revenue looks great. But remember that 25% profit margin from number one? That customer only left you $37.50 in profit, which means you lost money bringing them in, unless they come back.
To raise it:
Create bundles or packages that naturally increase the size of each purchase.
Offer a simple add-on at checkout or at the end of a service.
Give first-time customers a reason to return, like a follow-up email with a thank-you offer.
Repeat customers are where the real profit lives, because you only pay to acquire them once.
5. OWNER’S PAY
This is the one most women skip entirely. Owner's pay is simply what you actually paid yourself this month, not what the business made and not what you hope to take out someday.
How to calculate it: Add up every transfer or paycheck from the business to you personally this month.
Example: The business made $3,000 in profit, and you transferred yourself $500. Your owner's pay is $500.
Why it's scary: When money is tight, the owner is usually the first one to go unpaid. It feels generous and responsible in the moment. Over time, it turns your business into an expensive hobby and makes it much harder to know if the business is truly working.
To start paying yourself consistently:
Pick a set amount or percentage of revenue, even a small one, and pay it on the same day every month.
Treat it like any other bill the business owes.
Raise it a little every quarter as your margins and runway improve.
If you want a full system for this, Profit First by Mike Michalowicz is a popular method that builds owner's pay into every dollar that comes in.
NOW MAKE IT A MONTHLY HABIT
Checking these numbers once is helpful. Checking them every month is what changes your business, because you start to see patterns before they become problems.
Here's a simple routine:
Pick a standing date, like the first Monday of the month, and add it as a recurring event on your calendar.
Block 30 minutes and pull last month's numbers from your bookkeeping software or bank statements.
Fill in all five numbers next to last month's so you can see which way each one is moving.
Choose one action for the month ahead. Just one. Small and consistent beats a big overhaul you never finish.
We made a quick spreadsheet for you to make it even easier (just hit the button below to download). It's one page with a spot for each number, a last month and this month column, and a quick fix for each one if it's heading the wrong way.
Remember, these numbers are just information, and once you have it, nothing about your business has to feel scary in the dark anymore.