A business owner who tracks twenty measures usually acts on none. A business owner who tracks six or seven, every month, notices trouble early and knows which decisions are working. The right measures depend on your business, but a core set applies almost everywhere. They are simple to calculate from the records you should be keeping anyway.

1. Sales

The most basic measure is how much you sold in the period. Track it monthly, compare it with the same month last year and with your plan, and break it down by product or branch if you can. Seasonal businesses should read the pattern, not just the total. The seasonal sales and stock planner sets a plan and tracks actual against it.

2. Gross margin

Gross margin is the share of sales left after the direct cost of the goods or services. If you sell for KES 1,000 and the goods cost KES 650, the margin is 35 percent. A falling margin means costs are rising faster than prices, or discounts and waste are growing. The cost of goods sold monthly workbook calculates it each month, and how to read a profit and loss statement puts it in context.

3. Net profit

After all costs, including rent, wages and tax, what is left? Net profit tells you whether the business is truly making money. Track it as a number and as a percentage of sales. A profitable business can still run out of cash, which is why the next measure matters.

4. Cash balance and cash flow

Cash is what pays the bills. Track the closing bank and M-Pesa balance each month, and look ahead with a forecast. Cash flow forecast for a small business explains how, and the 12-month cash flow forecast provides a layout. Watch the lowest point in the coming months, not just today's balance.

5. Debtors and days to collect

If you sell on credit, measure how long customers take to pay. Divide the money owed to you by your daily sales to get the days to collect. A rising number means cash is stuck in unpaid invoices. How to collect late payments from customers without losing them gives a process, and the aged receivables tracker shows who owes what.

6. Stock turnover

For businesses that hold stock, how fast does it sell? Divide the cost of goods sold by the average stock value to get the number of times stock turns in the period. Slow turnover means cash tied up in goods that may go out of date. The reorder level and safety stock calculator helps you hold the right amount.

7. Customers

Track the number of customers, the number of new ones, and how many return. Acquiring a new customer usually costs more than keeping an existing one. A short customer log, even a spreadsheet, shows you who your best customers are and when they stop buying.

8. Break-even point

Know the sales you need each month to cover your costs. Anything above it is profit; anything below is a loss. Break-even analysis for small businesses shows how to calculate it, and the break-even and pricing calculator tests the effect of price changes.

9. Tax compliance

A compliance measure is a good one: are all returns filed and paid on time? Count the number of deadlines met and missed each month. Penalties are an avoidable cost. The KRA filing calendar for small businesses lists the dates.

How to review them

Put the measures on one page, one row per month, and update it once the month is closed. Compare each with last month and with the target you set. Ask two questions of every change: why did it happen, and what will I do about it? How to run a month-end close for a small business describes the routine that produces reliable numbers.

Set targets and keep them modest

A KPI without a target is just a number. Set a realistic target for each, based on last year's results, and raise it gradually. Share the relevant targets with your team, so everyone knows what the business is aiming for. The monthly KPI dashboard puts the measures on a single sheet. Measure the few things that matter, review them regularly and act on what they tell you.