3 Financial Metrics Every Growth Stage Business Should Be Reviewing Monthly
Strong businesses are built on small, consistent check-ins. These are the metrics worth reviewing every single month.
Most founders receive a profit and loss report every month and never look past the revenue line.
They are told to “know their numbers,” but no one shows them how to use those numbers as a leadership tool.
At Sequoia CPA, I work with service-based founders who are growing quickly but want that growth to feel strategic and steady, not reactive. And that starts with focusing on a few key metrics that actually tell you what is working and what needs attention.
Here are three numbers I walk through regularly with my clients. If you review nothing else each month, start here.
1. Net Profit
What it tells you:
Net profit shows what your business actually keeps after all expenses are paid. It reflects how profitable your operations really are and whether your business model is sustainable.
How to calculate it:
Net Profit = Total Revenue minus Total Expenses
This is your bottom line. At Sequoia, I often see founders with rising revenue but flat profit and that is usually a sign it is time to reevaluate either cost structure or pricing strategy.
Ask yourself:
• Am I running a profitable model or just staying afloat?
• What expenses crept in this month?
2. Cash Flow
What it tells you:
You can be profitable and still feel cash poor. That is why I review cash flow separately from net profit.
Cash flow shows how money is moving in and out of your business in real time. It helps you stay ahead of timing issues so you can avoid stress around payroll, vendor payments, or your own compensation.
How to calculate it:
Cash Flow = Cash Inflows minus Cash Outflows over a specific period (usually monthly)
This goes beyond your P&L. At Sequoia, I include things like loan payments, credit card activity, owner draws, and inter-account transfers because those all impact your bank balance, even if they are not on the report.
Ask yourself:
• Do I know what is coming in and going out this month?
• Can I afford this next decision?
3. Gross Margin
What it tells you:
Gross margin shows how much of your revenue is left after covering direct costs. In service businesses, this includes subcontractors, tools or platforms you use to deliver your work, or any hard costs passed on to clients.
How to calculate it:
Gross Margin = (Revenue minus Cost of Goods Sold) divided by Revenue
At Sequoia, I track gross margin to help clients understand if their offers are still performing. If margin is shrinking, it could mean rising costs, over-delivery, or a need to revisit pricing.
Ask yourself:
• Are my offers still performing the way I want them to?
• Is it time to revisit my pricing?
Strategy Starts With Awareness
You do not need to track everything. But if you consistently review these three numbers, net profit, cash flow, and gross margin, you will start to lead your business differently.
These numbers are not just financial data.
They are early signals.
They help you make better decisions, spot problems before they grow, and build something that lasts.
Want to talk about how to apply this in your business?
What we covered in this article:
Net profit for service based businesses
Monthly cash flow tracking
Gross margin analysis
Financial metrics for growing businesses
Bookkeeping with strategy
CFO insights for small business owners