The key financial indicators for an SME
The 10 indicators that are enough to run an SME day to day — and how to track them without spending your days on it.
Running a business does not require dozens of spreadsheets. Around ten well-chosen indicators, tracked regularly, are enough to know where you stand and react in time. Here are the ones we recommend for most small and medium businesses.
Activity
1. Revenue
Tracked monthly, compared with the same month last year and with your budget. Break it down by product, activity or main customer to see what drives growth.
2. Order book
For project- or order-based businesses, it gives visibility over the coming months that past revenue cannot.
Profitability
3. Gross margin (% of revenue)
It measures what is left after the direct cost of what you sell. A drop of a few points can wipe out all your profit.
4. EBITDA
The indicator of operating performance: what the business generates before depreciation, financial expenses and tax.
5. Break-even point
The minimum revenue to cover your fixed costs. Knowing it tells you each month whether you are above or below the waterline.
Cash
6. Available and forecast cash
Today's bank balance is not enough. Track forecast cash over the next 13 weeks to anticipate pressure.
7. Customer payment period
It is often an SME's first cash lever.
8. Working capital requirement
Inventory + trade receivables − trade payables. Expressed in days of revenue, it shows how much cash your operating cycle ties up.
Financial structure
9. Debt
It shows how many years the business would need to repay its loans with the cash it generates. Banks pay close attention to it.
10. Equity
It measures the company's solidity and its ability to absorb a shock. Equity that is too low limits access to credit.
How often should you track them?
| Frequency | Indicators |
|---|---|
| Weekly | Forecast cash, customer receipts |
| Monthly | Revenue, gross margin, customer payment period, working capital, comparison with budget |
| Quarterly | EBITDA, break-even point, profitability by activity |
| Annually | Debt, equity, return on capital |
Building your dashboard
A good dashboard fits on one page, can be read in five minutes and always compares three things: actual, target and the same period last year. Start small: five indicators tracked every month are worth more than twenty updated once a year.