Are you leveraging your business metrics to make better management decisions for your business? According to a recent survey, conducted by CPA2Biz, you aren’t. CPA2Biz, the marketing and technology services subsidiary of the American Institute of CPAs, recently surveyed 500 small businesses with an average of less than 15 employees and $2 million in annual revenues.
“Clearly, based on the survey, these small business owners are not taking advantage of simple tools that would help them better manage their profitability and performance,” said Bill Reeb, CPA.
According to the survey, the number one issue facing small business is ensuring adequate cash flow from operations, according to 83% of survey respondents. That’s no real surprise. Most small business owners I’ve encountered say cash flow is the issue that keeps them awake at night.
Driving this issue is the fact that 51% of those surveyed say they don’t use budgets or forecasts to help manage their business and 32% say they don’t have specific metrics in place to monitor performance on a daily or weekly basis. And only 17% agreed that daily or weekly metrics are as important to them as their financial statements.
Plus another key survey finding indicated only 21% of participants measure their return on investment of advertising and promotional dollars; and only 11% stated that they regularly monitor non-financial indicators, like customer support calls and visits to the company Web site, to further evaluate business performance.
Surely you can do better. Take the time to determine key metrics for your business and make a pledge to keep on top of them next year. You’ll sleep better.
What do you think? Leave me a comment.