A print firm in Leicester bought a reporting package. It produces a dashboard with forty-one measures on it, colour-coded, updated overnight, available on a phone. The managing director looked at it every day for three weeks and now looks at it never, because on any given morning about nine things are amber and none of them tell him what to do.
On the wall of the same office is a whiteboard with five numbers written in marker, changed every Monday by hand. Everybody in the building knows what all five are.
Gross margin tells you whether the work is worth doing
Gross margin is revenue less the direct cost of delivering it, as a percentage. Materials, subcontractors, and the labour that goes into the job. Not the rent, not the office, not you.
It is the first number because it is the one that says whether the thing you sell makes money at the price you sell it for. Turnover going up with gross margin going down is the most common pattern in a business that is about to have a difficult year, and it is invisible if you only watch the top line. It usually means you have won work by pricing it keenly, or that material costs moved and your quotes did not.
Watch it by job type, not just in total. Most businesses have a category of work they do a lot of and lose money on, and the aggregate margin hides it because the profitable work subsidises it. When you find it, the answer is normally to raise the price and be willing to lose the work, which is a decision that feels dangerous and almost never is.
Debtor days tell you who is funding whom
Debtor days is trade debtors divided by revenue, multiplied by 365. It is the average number of days between doing the work and being paid for it, and it is the single clearest measure of whether your customers are financing themselves with your money.
Calculate it monthly and look at the trend rather than the absolute figure. Thirty-eight days in a trade that invoices on thirty is normal. Thirty-eight drifting to fifty-two over six months is your working capital leaving the building, and the fix is a credit control process rather than a bigger overdraft.
Put an aged debtor list next to it. The average conceals the two invoices from January that nobody has chased because chasing them would mean an awkward phone call. Every business has those, and the length of time they have been outstanding is usually a good predictor of whether they will ever be paid.
The mirror image, creditor days, is worth knowing too, though it belongs on a different sheet. If your debtor days exceed your creditor days by a wide margin, you are lending money to your customers and borrowing it from your suppliers, and growth makes that gap wider rather than narrower.
Stock turn and revenue per employee
If you hold stock, stock turn is cost of sales divided by average stock held. It says how many times a year you sell through everything on the shelves. Low stock turn means cash sitting in a stockroom, and in food, fashion or anything with a date on it, it means write-offs coming.
The right number is entirely trade-specific: a greengrocer and a jeweller are not comparable and there is no point pretending otherwise. What matters is your own figure over time, and the split between the lines that move and the lines that do not. Most stockrooms contain a tail of slow items that were bought once for a reason nobody now remembers.
Revenue per employee is the other structural measure, and it is the one that tells you whether growth is real. Revenue divided by full-time equivalent headcount, including you. If turnover rises 30% and headcount rises 35%, you have bought the growth rather than earned it, and you now have a larger business doing the same amount of good per head with more risk attached.
It is a blunt measure and it has an obvious failure mode, which is that it improves when you understaff. Read it alongside something human, such as staff turnover or the number of jobs that had to be redone.
Cash runway is the one that ends the argument
Cash runway is how many weeks of operating you can fund from the cash and facilities you have, at the current rate of burn. It is not a ratio, it is a countdown, and it is the number that converts every other discussion into a decision.
Build it off the thirteen-week cash flow, updated weekly, with the known lumps in it: the VAT quarter, the Corporation Tax payment due nine months and a day after your year end, the insurance renewal, the rent quarter day. A business that is profitable on paper can still have a nine-week runway in the quarter where two of those land together, and knowing that in advance is the difference between a phone call to the bank and a phone call from the bank.
If you can only keep one number, keep this one.
Five is the limit because you review them weekly
The reason to cap it at five is not aesthetic. It is that a measure changes behaviour only if it is looked at often enough to be noticed changing, and discussed by people who can affect it. Forty-one measures reviewed annually change nothing. Five measures reviewed every Monday morning, in fifteen minutes, with one person accountable for each, change what gets done on Tuesday.
Write them where everybody can see them. Use last week's actual, this week's target, and the direction of travel. Do not smooth them, do not seasonally adjust them and do not let anybody build a version with a methodology note attached to it.
Then be prepared to swap one out. The five you need while you are fighting for cash are not the five you need while you are integrating an acquisition. Review the set once a year, change at most one or two, and resist every request to add a sixth.
Where this shows up in the game
Business Baron reports the figures a real owner-manager would actually have, at the moment they would have them, which is usually a month later than they would like. Margin drift, debtor days creeping out and a runway shortening ahead of a tax quarter are all visible if you look, and none of them announce themselves. The free game has no time limit, so you can spend as many in-game years as you like finding out which numbers you should have been watching.