I have a true confession for you, bright and early today.

I hate failing.

I know, I know. Failure is part of success. Fail forward. Blah blah blah.

I don’t care. I hate it to my core. (#enneagram3 much?!)

A lot of times when we think we are failing, it’s only because we are measuring ourselves against someone else’s success.

Here’s what I mean:

Feeling like a failure because your sales numbers are way lower than that person on Instagram who has a similar business model

Feeling like a failure for only raising $75k at your virtual gala when you saw that another organization raised $250k

Feeling like a failure because you only have 10 clients and your business bestie has 35

The problem is, other people’s metrics are irrelevant. Insignificant. Frankly worthless.

The most important measuring stick to use is your own.

I get asked ALL. THE. TIME: What’s a good profit margin? How much should I be spending on my team? How much income do I need to bring in every month?

The people on the other end of those Zoom calls probably hate me but the answer first is always: It depends!

That’s the truth though. It depends on your business model. If you’re a nonprofit or small business. What your revenue streams are. How long you’ve been in operation. How much revenue you’re bringing in. It goes on!

I’ll never leave you hanging though!

The best way to assess your own business is by reviewing your own historical numbers and watching the trends.

If you want to know if your profit margin is “good”, start by calculating your profit margin every month for the last 12 months, side by side. Is the number generally going up? Is it going down?

You’ll likely have highs and lows but when you look at the trend line, we want to see it going up (But not too much! That could be a sign you need to reinvest in the biz).

If you want to know how much income you should be bringing in, start by looking at your average monthly expenses for the last 12 months. You need at least that much per month (plus say 20% for savings/profit).

So, if you were ever wondering if your numbers are “good”, you now have my official answer!

Here’s a quick list of metrics you should be looking at in your business or nonprofit:

1. Profit margin
2. Cash on hand
3. Revenue diversity
4. Burn rate (average monthly expenses)

PS – You can always grab our Profit Playbook here here to help you calculate these metrics and more.