The 3 Numbers Every UK Business Owner Must Know (But Most Don't)
- jaygosal
- Nov 7
- 6 min read
Updated: 2 days ago
Here's a startling fact: nearly two in five small business owners (38%) are unaware if they were profitable last month.
Let that sink in for a moment. Four out of ten business owners across Derby, Coventry, and the UK are flying blind – working hard, serving customers, paying bills – but not actually knowing if they're making money.
If that resonates with you, you're not alone. And more importantly, you're not a failure. You're just missing the right information.
At AccountingBliss, we believe in our Thriving Business Framework: the perfect balance of mindset, financial clarity, and business strategy. Today, we're focusing on the financial clarity piece – specifically, the three numbers that can transform how you run your business.
These aren't complicated ratios or obscure metrics. They're straightforward, powerful numbers that tell you exactly what's working and what isn't.
Why Most Business Owners Avoid Their Numbers
Before we dive into the numbers themselves, let's address the elephant in the room.
More than half (55%) of business owners avoid finances primarily due to anxiety, lack of enjoyment, or simply being busy. Sound familiar?
Maybe you're brilliant at what you do – whether that's building websites, fixing boilers, or managing rental properties – but spreadsheets make your head spin. Perhaps you tell yourself "I'm just not a numbers person" and hand everything to your accountant once a year.
Here's the truth: you don't need to be a numbers person. You just need to know the right numbers.
Think of it like driving a car. You don't need to understand how the engine works, but you do need to know your speed, fuel level, and when to brake. These three business numbers are your dashboard – they tell you if you're on track or heading for trouble.
Number 1: Gross Profit Margin (Your Business's Health Score)
What Is Gross Profit Margin?
Your gross profit margin shows how much money you keep from every sale after paying for the direct costs of delivering your product or service.
Formula: (Revenue – Cost of Sales) ÷ Revenue × 100
Why It Matters: This number reveals whether your core business activity is actually profitable before you even think about rent, salaries, or marketing costs.
Let's say you're a Derby-based tradesperson. You charge a customer £1,000 for a job. Materials cost £400, and subcontractor fees are £200. Your gross profit is £400, giving you a 40% gross profit margin.
If your margin is too low, you're working hard but not making money. If it's shrinking over time, something's wrong – maybe supplier costs have increased, or you're undercharging.
What's "Good"?
This varies wildly by industry:
Retail: 25-40%
Professional services: 50-70%
Manufacturing: 20-35%
Construction: 15-25%
The key isn't hitting a perfect number – it's knowing your margin and tracking whether it's improving or declining.
Real example:
One of our Coventry clients, a small engineering firm, discovered their gross profit margin had dropped from 38% to 28% over two years. Digging deeper, we found a major customer was demanding discounts while their material costs had risen. Armed with this knowledge, they renegotiated pricing and their margin recovered to 35% within six months.
Number 2: Cash Runway (Your Business's Survival Clock)
What is 'Cash Runway'?
Cash runway tells you how many months your business can survive at current spending levels if no money comes in.
Formula: Current Cash Balance ÷ Average Monthly Operating Expenses
Why It Matters:
Over half (55%) of business owners struggle specifically with cash flow management, and it's easy to see why. You can be "profitable on paper" but unable to pay staff because customers haven't paid their invoices yet.
Cash runway is your early warning system. It tells you how much breathing room you have before things get critical.
Let's say you're a Midlands-based landlord with three properties. You have £15,000 in your business account, and your monthly costs (mortgages, maintenance, insurance) average £3,000. Your cash runway is 5 months.
Why this matters: If a tenant stops paying or you have unexpected repair costs, you know exactly how long you can last before needing to take action.
What's "Good"?
Minimum: 3 months of operating expenses
Comfortable: 6 months
Excellent: 12+ months
More than half (51%) of businesses are caught off guard by unexpected costs. A healthy cash runway means unexpected costs are annoying, not catastrophic.
Action tip: If your runway is under 3 months, it's time to have serious
conversations about either increasing income or reducing costs. Don't wait until you're at 1 month to panic.
Number 3: Profit Per Hour (Your True Earning Power)
What is 'Profit per Hour'?
This shows how much profit your business generates for every hour you work.
Formula: Net Profit ÷ Total Hours Worked (by you and employees)
Why It Matters:
Revenue sounds impressive at networking events, but profit per hour tells you what you're actually earning for your time and effort.
Here's a reality check: if you're working 60-hour weeks and your business makes £30,000 profit annually, you're earning just £9.62 per hour. You'd be better off working at Tesco.
Let's say you run a consultancy from Derby. Your business generated £80,000 net profit last year. You worked 1,800 hours (roughly 35 hours per week for 50 weeks). Your profit per hour is £44.44.
This number forces you to ask the hard questions:
Are you spending time on activities that actually generate profit?
Should you increase prices?
Could you outsource low-value tasks?
Is this business genuinely worth your time and energy?
What's "Good"?
Compare your profit per hour to what you could earn as an employee in your field. If you're a qualified accountant earning £25/hour from your business when you could earn £40/hour employed, something needs to change.
Real example: A Derby-based marketing consultant realised she was earning £18/hour from her business despite 50-hour weeks. We helped her identify her most profitable services, raise prices by 30%, and drop low-margin clients. Within a year, her profit per hour hit £65, and she was working 35-hour weeks.
How These Numbers Connect to Your Thriving Business
At AccountingBliss, we don't just crunch numbers – we help you build a business that supports the life you actually want. That's our Thriving Business Framework in action:
Mindset: Knowing your numbers eliminates anxiety. You're not guessing anymore; you're making informed decisions from a place of clarity and confidence.
Financial Clarity: These three numbers – gross profit margin, cash runway, and profit per hour – give you complete visibility over your business's financial health. No surprises, no panic, just facts.
Business Strategy: Armed with this clarity, you can make smart strategic decisions. Should you hire someone? Can you afford that new equipment? Is it time to raise prices? The numbers tell you.
Getting Started: Your Action Plan
This week:
Calculate your gross profit margin for last month
Work out your cash runway today
Estimate your profit per hour for last year
This month: Set up a simple system (spreadsheet or accounting software) to track these three numbers monthly.
This quarter: Review trends. Are your numbers improving or declining? What's driving the changes?
Don't let the fear of numbers hold your business back. A quarter (28%) of business owners admit they don't think of themselves as 'a numbers person' – but you don't need to be. You just need to know these three.
How AccountingBliss Brings Clarity to Derby & Coventry Business Owners
We see it all the time: talented, hardworking business owners trapped in the day-to-day grind, unsure if they're actually building something sustainable.
Here's how we help:
Calculate your key numbers and explain what they mean in plain English
Set up simple dashboards so you can see your numbers at a glance
Identify profit leaks and opportunities you're missing
Create action plans to improve your margins, cash flow, and profitability
Provide ongoing support so you always know where you stand
We're not just accountants who show up once a year. We're your strategic partners, helping you build financial freedom through clarity, not complexity.
Ready to Know Your Numbers?
If you're a Derby or Coventry business owner tired of flying blind, let's change that. We offer a free 30-minute consultation where we'll:
Review your current financial situation
Calculate these three critical numbers with you
Show you exactly where you stand and what to focus on next
Get in touch:
📞 Derby: 01332 577 289
📞 Coventry: 02475 098 680
Stop guessing. Start knowing. Let's build your thriving business together.
About AccountingBliss: We're Derby and Coventry-based accountants who believe every business owner deserves financial clarity and confidence. Through our Thriving Business Framework, we help SMEs across the Midlands move from anxiety and overwhelm to clarity and control. We explain things simply, respond quickly, and genuinely care about your success.
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