10 Financial Yardsticks for Your Small Business

If you are a small business owner or if you are a business owner soon to be, this post is for you. You've been told your finances should be in the black before the year is out, and that's just not possible with all the expenses of running your business. A series of yardsticks will help you break down what it takes to run a successful small business and get more organized about how your finances work. So don't delay - start learning how to run your company better today!

Each measure can help provide insight into whether or not it's too early, too late, or just right for turning issues around financially within 12 months. There is plenty of room for improvement, so don't feel like you've missed the boat. We'll lay out the basics in this post, but we recommend taking the time to work your way through the rest of our series on Small Business Finance.

To put these yardsticks together we reviewed research from more than 20 academic experts from around the world and drew on our own expertise as well. As an added benefit, each yardstick also contains two related forms that can help you get over any hurdles that might crop up during your journey.

Before we dive in, a quick definition of our 10 financial yardsticks:

7 of the 10 yardsticks are related to your company cash flow, or the company's inflows and outflows of cash over a set period of time. The other three are related to your company's asset management, which is the value and condition of your assets (things like equipment, inventory and money). A strong balance sheet provides security for you as an owner. For example it can help you borrow more if you need more cash.