5 Financial Metrics Every NZ Small Business Should Track (in Plain Language)

Most small business owners know their sales number and their bank balance. Fewer know the five numbers that actually tell them whether the business is getting healthier — or quietly leaking money.

1. Gross margin (your real product profit)

What it is: (Revenue − direct costs) ÷ Revenue. Why it matters: A growing topline can hide a shrinking margin. If every sale costs more to deliver, growth makes you poorer.

2. Cash runway (how long you survive with no income)

What it is: Cash on hand ÷ average monthly burn. Why it matters: The #1 cause of small business failure isn’t low profit — it’s running out of cash before the money arrives.

3. Average sale value (what each customer is worth)

What it is: Total revenue ÷ number of sales. Why it matters: Small improvements here compound across every customer, every year.

4. Customer acquisition cost (what a new customer costs you)

What it is: Marketing + sales spend ÷ new customers. Why it matters: If it costs more to win a customer than they’re worth, every new customer digs the hole deeper.

5. Debtor days (how long customers take to pay you)

What it is: (Accounts receivable ÷ revenue) × 365. Why it matters: 60+ debtor days is common in NZ trade businesses — and it’s free credit you’re handing out.

Turn the numbers into action

Tracking metrics is easy. Knowing what to do about them is the hard part. That’s why our financial health check pairs the numbers with a plain-language report: where you stand, how you compare, and three things to do next.

Keep it simple

You don’t need a dashboard of fifty numbers. Start with these five, review them monthly, and you’ll know more about your business than most owners ever do.