IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog article has been provided by Seth Rudin. Mr. Rudin is a senior business broker at IBA (www.ibainc.com):
Keeping Your Eyes on the Road – Why Every Small Business Needs a Financial Dashboard
Running a small business can feel like steering a ship through unpredictable waters. You have your eyes on sales, costs, customers, and countless other moving pieces. Without the right tools, it’s easy to get lost in the day-to-day and miss critical warning signs—or opportunities for growth. That’s where a financial dashboard comes in.
A dashboard allows you to see, in one place, the key financial metrics that truly matter. While every business has its own nuances, the following core indicators provide an essential pulse check for nearly any organization. By developing a strong financial acumen, owners are able to make strong sales and operational decisions. As a business broker dealing with a variety of businesses, I look to see how strong my business owners understand their own finances. It helps me understand how well a business is managed.
- Sales and Sales Growth (Year-over-Year, Quarter-over-Quarter)
Sales are the lifeblood of any business. Tracking not only your total sales but also how they grow or decline year-over-year (YoY) and quarter-over-quarter (QoQ) gives you insight into momentum. A strong dashboard will highlight trends: Are you gaining traction? Plateauing? Or showing signs of decline that need attention? Seeing these changes in real time allows you to pivot quickly.
- Gross Margin % and Period-to-Period Change
Sales don’t mean much without healthy margins. Gross margin—the difference between sales and cost of goods sold—tells you how much profit you actually retain from each dollar of revenue. Monitoring your margin percentage and how it changes from the prior period helps reveal whether rising costs, pricing strategies, or inefficiencies are eating into profitability. A shrinking margin is a flashing red light; an improving one can validate operational wins.
- Units Sold and Growth Year-over-Year
For product-based businesses, tracking the number of units sold can provide clarity beyond revenue alone. A bump in sales revenue could come from higher prices rather than more customers. Monitoring units sold YoY reveals whether your market penetration is growing, stable, or shrinking. This metric can also uncover seasonality patterns and inform smarter inventory management.
- Operating Expense Changes (YoY and MoM)
Revenue growth is exciting, but rising overhead and operating costs can erase the benefits just as fast. Tracking operating expenses both year-over-year and month-over-month shines a light on cost discipline. A sudden spike in monthly expenses could signal waste or hidden inefficiencies. On the other hand, gradual YoY increases may be justified as part of scaling operations. Either way, visibility ensures expenses are strategic rather than accidental.
- Opex Scaling
Opex Scaling is the ratio of the growth in your Revenue Year over Year to the growth in your company’s operating expenses. The formula takes the Revenue Year over Year growth % and is then divided by the Year over Year growth in Operating Expenses (Opex). This can be computed on a monthly and quarterly basis as well. The desired result is that revenue growth exceeds the growth in your operating expenses.
- Quick Ratio
Business owners should monitor their ability to cover their business debts. There are a few options to track such as the Current Ratio, Debt Ratio, Debt Service Coverage Ratio and the Quick Ratio. For monitoring your business on a monthly basis, the Quick Ratio provides you with a strong indication if your profits will cover your debt payments. The formula for the Quick Ratio is (Current Assets minus your Inventory) divided by your Current Liabilities.
- Accounts Receivable Health: DSO and A/R Aging
Cash flow issues sink small businesses faster than almost anything else. That’s why Days Sales Outstanding (DSO) and accounts receivable (A/R) aging are must-track metrics. DSO shows how long it takes to collect on invoices, while A/R over 60 days (and its YoY change) highlights potential problem accounts. A dashboard that flags rising overdue balances allows you to tighten credit policies or follow up with delinquent customers before liquidity becomes an emergency.
The Bottom Line
Small businesses succeed when leaders make decisions based on facts, not guesswork. A financial dashboard consolidates critical metrics—sales, margins, units, expenses, receivables, and liquidity metrics—into a single, actionable view. By monitoring these indicators consistently, business owners can spot risks early, capitalize on growth opportunities, and keep their operations healthy and resilient.
In short: if you don’t already have a financial dashboard, it’s time to build one. The clarity it provides could be the difference between surviving and thriving.
If you have questions relating to the content of this article or the process associated with selling a business in Washington or Oregon, Seth Rudin would welcome the opportunity to talk with you. Mr. Rudin is licensed to sell businesses & real estate in both Washington and Oregon. Mr. Rudin can be reached at (425) 454-3052 or seth@ibainc.com.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, accounting, legal, and financial planning communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.