You're Over-Analyzing: Stop Measuring EVERYTHING ALL and Start Measuring What Matters

Are You Measuring the Right Numbers in Your Business?

As an outsourced accountant, I see this mistake all the time: businesses fail not because they’re ignoring their numbers, but because they’re focused on the wrong ones. Too many entrepreneurs get caught up in the numbers game, paying attention to metrics that don’t actually move the needle. Today, I want to walk you through what you should be tracking to not only stay in business but to grow successfully.

Start With Cash—It’s King! 👑

Let’s start with the most important number in your business: cash. It’s not flashy, but it’s the foundation of everything. We all know the saying, “Cash is King,” but you’d be surprised how many entrepreneurs overlook this simple truth. Instead, they focus on sophisticated ratios like liquidity ratios, current ratios, or inventory turnover ratios. While those might sound good, they don’t matter if you don’t have cash in the bank. So, ask yourself—do you have a system in place to keep track of your cash balance?

Measure What Matters: OKRs Over Ratios 📖

Another crucial point comes from the book Measure What Matters by John Doerr, which introduces the concept of OKRs—Objectives and Key Results. Instead of getting lost in a sea of financial ratios, start with your objective. What are you trying to achieve in your business? From there, identify key results—specific numbers that directly contribute to hitting that objective.

I learned this lesson early on in my career. As a young controller at a homebuilding company, I tried impressing our CEO with a list of metrics I thought were important. He threw the whole list away and taught me a valuable lesson: the only numbers that matter are the ones that help you achieve your goal. For the homebuilder, it was simple: 1. How much cash is in the bank to keep building homes? 2. How many “digs” did we start this month? (Digs were the holes we dug for new homes, which triggered down payments and loans.)

Track Metrics That Drive Growth 📈

The key takeaway here is that most standard metrics are only indicators of what’s already happened—they’re past performance metrics. They don’t influence future growth. What really matters are the numbers that help you take action now to impact your business. Like my old CEO did, you should be focusing on the numbers that drive success today and tomorrow, not just numbers that tell you what happened last month.

Let Us Help You Grow! 🌱

If this advice resonates with you, I’d love to invite you to check out Ignite Spot’s outsourced accounting services. We’re here to help you become more profitable by focusing on the right metrics for your business. The best way to find out if we’re a good fit is to schedule a free Xero or QuickBooks review. We’ll take a look at your financials, give you actionable feedback, and show you how we can help. No long-term contracts—just month-to-month flexibility. Let’s work together to make your business more profitable.