6 Key Numbers Every Small Business Should Track (and What to Do About Them)
Sound familiar? You’re working flat out on your small business, things feel a little chaotic, and your sales just aren’t growing the way you hoped. You’re not sure what to do next and that’s exactly when it’s time to check your numbers.
As a small business owner, you wear countless hats. Chances are, you started your business because you’re creative, passionate, and brilliant at what you make and not because you love spreadsheets (not everyone does, though I secretly do!).
Numbers might not be the fun part of your business, but they’re the part that brings clarity and shows you what’s really going on.
You probably already have a gut feeling about your bestsellers and what’s working. But gut instinct alone can only take you so far. A successful business is about balance: your creativity and the numbers to back it up.
The good news? Looking at your numbers doesn’t have to be scary. Once you understand them, you’ll feel calmer, clearer, and more confident about what to prioritise, instead of trying to do everything at once.
Yes, it’s a bit of maths, but it’s the kind you’ll actually use (no algebra here!) and it can be made so so simple.
With almost 20 years’ experience as a retail merchandiser, and now running my own product business, Skudaboo, I help small business owners make sense of their numbers by turning big-brand practices into simple, practical steps for managing profit and stock.
So, let’s break down the key metrics every small business owner should understand and what to do when they're not where you need them to be.
1. Net Revenue (Your Sales)
What it means: Your net revenue is the total money your business brings in from sales, minus VAT (if applicable).
It’s basically the top line of your business, and it’s influenced by three key metrics: how many people visit your site, how many of them buy, and how much they spend per order.
📱Formula:
Net Revenue = (Website Sessions × Conversion Rate × Average Order Value) ÷ (1 + VAT)
Example:
- 1000 sessions x 1% conversion rate = 10 orders
- 10 orders × £12 AOV = £120 Gross Revenue
- £120 ÷ 1.2 (VAT at 20%) = £100 Net Revenue
Why it matters:
Revenue is the clearest measure of your business size as it's how much money is actually coming in. Tracking it monthly and year-on-year helps you spot trends, seasonal dips, and growth opportunities.
How to increase your revenue.
- Increase traffic → Work on SEO, PR, emails or social media to get more people to your site.
- Improve conversion rate → Make it easier for people to buy (better product pages, clearer shipping info).
- Boost AOV → Encourage people to spend a little more each time (bundles, upsells, free shipping thresholds).
2. Profit (What You Keep)
What it means: Profit is your revenue minus all costs (materials, packaging, website fees, ads, etc.).
📱Formula:
Profit = Net Revenue – Costs
Margin % = Profit / Net Revenue
Example:
Revenue = £1,000
Costs = £600 (suppliers, packaging, shipping, etc.)
Profit = £400 (40% margin)
Why it matters:
High sales don’t guarantee a healthy business as if your costs are too high, you’ll struggle to pay yourself or reinvest.
What to do if profit is low:
- Review prices → Are you undercharging?
- Check product margins → A product with a 10% margin means you need to sell 10× more to make the same as one with a 50% margin.
- Cut unnecessary costs → Subscriptions, shipping supplies, or too much stock.
- Boost ecommerce sales → Focus on driving more traffic (SEO, email marketing, PR) and improving conversions so you cover your overheads more efficiently.
✨ A common struggle I see is that many small business owners are making sales but still can’t pay themselves or reinvest. Often, it’s because overheads are quietly eating up too much of the profit.
And honestly, there’s nothing worse than hitting a sales goal, only to realise there’s nothing left over for you. Been there!
Right now, I don’t pay myself from my product business, Skudaboo (which is why I also freelance). Instead, I’m focusing on growing my sales and traffic through improving my SEO before investing in new products or big changes.
3. Conversion Rate (Shoppers → Buyers)
What it means: Out of everyone who visits your shop/website, how many actually buy something.
📱Formula:
Conversion Rate = (Orders ÷ Visitors) × 100
Example:
100 orders ÷ 5,000 visitors = 0.02 = 2% Conversion Rate
That means for every 100 people who visit, only 2 end up buying.
Why it matters:
You can have thousands of people landing on your website every month, but if they’re not converting into paying customers, you won’t see the sales. The good news? Even tiny improvements in conversion make a huge difference.
A 1% conversion rate with 1,000 visitors = 10 orders. Increase it to 2% and you’ve doubled your sales without any extra traffic.
Plus, there’s no point spending loads of time or money driving more people to your shop if the ones already there aren’t buying. A low conversion rate usually means one of two things:
- Something on your website is putting people off.
- The traffic you’re attracting isn’t the right audience.
What is a good conversion rate?
According to Littledata, the average Shopify conversion rate is around 1.4% to 2.5%, though this varies by industry and niche. Hitting 3.2%+ puts you in the top 20% of stores, while 4.7%+ puts you in the top 10%.
What to do if your conversion rate is low:
Fix your product pages → Use clear, bright photos, engaging descriptions, size/fit details, and be upfront about shipping costs. For more ideas, check out The Ecommerce Assistant's blog: 9 Expert Tips for Creating Irresistible Product Pages.
Make checkout easy → Reduce the number of steps, offer guest checkout, and make sure payment/shipping options are clear.
Bring in warmer traffic →
- Social ads & Instagram traffic are often 'cold' which means people but not ready to buy.
- Google search traffic is typically 'warm' because if someone searches buy handmade candles UK, they’re already shopping. That’s why working on your small business SEO is so powerful (Visit Studio Cotton's blog for some very valuable and practical SEO tips).
- Email subscribers are your warmest audience as they already love what you do. Focus on growing your list and sending consistent emails (I recommend following Katie Farrell for brilliant email marketing advice).
Check your bounce rate → If visitors land on your site and leave immediately, something’s off. Quick wins include speeding up your site, simplifying menus, and making sure your product photos + descriptions match what customers expect.
✨ This has been a key number for me to watch for my website, Skudaboo. I used to spend all my time coming up with fantastical ideas to attract customers on social media, but when I finally looked at my conversion rate, I realised I was overcomplicating things.
My website wasn’t working properly, and I wasn’t reaching the right audience. Now I’ve gone back to basics: optimising my website and focusing on SEO to connect with the right people.
Once that foundation is solid, then I can get creative with those bigger ideas.
4. Average Order Value (AOV)
What it means: The average amount a customer spends per order.
📱Formula:
AOV = Revenue ÷ Number of Orders
Example:
Revenue = £1,200
Orders = 60
AOV = £20
Why it matters:
If customers spend more per order, you don’t need as many customers to grow.
How to increase AOV:
- Offer bundles or add-ons.
- Set your free shipping threshold just above your AOV (e.g. if AOV = £20, set free shipping at £25).
- Add upsells like gift wrapping or personalisation.
✨ In my business, Skudaboo, where I sell art prints, adding frames and mounts has naturally boosted my AOV, because customers see them as useful add-ons to complete their purchase. Think about what your version of this could be:
- Shoe or clothing care products
- Cards or tags for gifting
- A matching accessory or “complete the look” item
Even small tweaks can have a big impact on your revenue.
5. Rate of Sale (How Fast Products Sell)
What it means: how many units you’re selling per week on average. In other words, it tells you how quickly your stock is moving through your business.
📱Formula:
Rate of Sale = Units Sold ÷ Number of Weeks ÷ Number of Products
Example:
60 candles sold ÷ 12 weeks ÷ 3 products = 1.67 units per week per product
Why it matters:
ROS helps you spot best sellers and identify slow movers. Products that take months to sell tie up cash you can’t reinvest elsewhere.
A lower ROS can also be a sign that your range is too broad and sales are being diluted across too many products.
It’s also a handy number for forecasting how much stock to buy in the future.
What is a good rate of sale?
ROS benchmarks can vary depending on your product. For example, food and consumables usually sell much faster than fashion or higher-priced homeware.
As a general guide:
- ROS under 0.25 = you’re selling less than one unit a month → time to take action.
- Are you selling enough to warrant you order quantities? If your supplier’s minimum order is 6 units and your ROS is 0.25, it could take you nearly 6 months to sell through that stock, so not ideal for your cash flow.
What to do if rate of sale is low:
-
Reduce your range → Too much choice spreads sales thin and dilutes sales.
- Consider discontinuing products with very slow sales.
-
Make sure your increasing traffic to your shop before adding any more products.
✨ Even with years of experience managing stock for big retailers, I made this mistake in my own business, I got carried away and added way too many products, which lowered my ROS, before I really had enough traffic to warrant them all.
Because my items were made to order, it didn’t impact stock levels too much, but it did confuse customers and slowed my sales. People don’t want 100 options, they want the right one. Think less Netflix scrolling, more finding the boxset you actually want to watch.
That’s why I’m now working on reducing my range to streamline the shopping experience. I’ll share in a future blog how this change affects my sales (fingers crossed for the better!).
6. Stock Cover (How Much Stock You Have)
What it means: How long your stock will last if you sell at your current rate.
📱Formula:
Stock Cover = Current Stock ÷ Average Weekly Sales
Example:
60 units in stock ÷ 10 sold per week = 6 weeks cover
Why it matters:
Too much stock = cash tied up. Too little = missed sales. Getting the balance right keeps your business moving smoothly.
Forward vs Backward Cover
Backward Cover = based on your average weekly sales in the past. It’s useful, but it can give misleading results if you’re just coming out of a peak period (e.g. Christmas) or heading into one. After Christmas, your sales may drop, making cover look faster. Before Christmas, sales usually increase, so stock might sell quicker than your cover suggests.
Forward Cover = based on your forecasted sales in the future. This gives a clearer picture but is a bit tricker to work out as involves a bit more math!
Example:
Stock = 5 units
- Week 1 forecast = 1 unit
- Week 2 forecast = 2 units
- Week 3 forecast = 3 units
- Week 4 forecast = 5 units
→ In this scenario, your stock would run out after 3 weeks → you have 3 weeks forward cover.
(Need help forecasting sales? Check out my blog on [How to Forecast Sales for Small Businesses]).
What to do if your cover is too high:
- Pause buying any more stock.
- Run promotions or marketing pushes to sell what you already have.
- Focus on driving sales in overstocked categories.
✨ From my own experience, I’ve seen both small businesses and huge retailers continue buying stock even when they already had enough stock to cover the next 6 months of their sales sitting in their warehouse.
To be fair, they often weren’t thinking about their stock in terms of this metric, they were just focused on adding newness.
But if you’ve already got enough stock to cover your sales for the next few months, buying more just ties up cash you could be using elsewhere.
The smartest move is to push through the stock you already have and only reinvest in your true best sellers, to ensure your still protect your sale, until you can get your cover down to a healthier number, to keep cash flowing.
How to Use Shopify Analytics to Track Your Business Numbers?
One of the reasons I love having a Shopify store (and working with other Shopify store owners!) is the reporting. Shopify makes it super easy to access your data, with lots of ready-made reports that give you the key numbers at a glance.
Here’s where to find the metrics we’ve talked about:
- Net Revenue, Conversion Rate, Sessions & AOV → Head to your Analytics Dashboard.
- Product Margin → Use the Gross Profit Breakdown Report (make sure your product costs are updated on your product listings).
- Current Stock Levels → Check the ABC Product Analysis Report.
-
Rate of Sale (ROS) →
- Open Total Sales by Product (or by Product Variant if you want to dig deeper).
- Divide the total sales by the number of weeks in your time period and by the number of products or variants in the report.
- Traffic & Order Sources → Look at Total Sales by Referrer or Sessions by Referrer to see if your customers are coming from Google, social, email, or direct visits.
- Bounce Rate → Find it in the Bounce Rate Over Time Report.
At-a-Glance: 6 Key Numbers Every Small Business Should Track
That was a lot to take in, right? Don’t worry, I’ve pulled everything together into a simple recap so you can see the key takeaways in one place.
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Revenue (Your Sales) → Total money coming in.
Grow it by increasing traffic, improving conversion, or boosting AOV.
-
Profit (What You Keep) → What’s left after costs.
Improve it by checking margins, reducing overheads, and reviewing pricing.
-
Conversion Rate (Visitors → Customers) → % of visitors who buy.
Fix product pages, streamline checkout, and focus on warmer traffic sources.
-
Average Order Value (AOV) → Average spend per order.
Increase it with bundles, upsells, and free shipping thresholds.
-
Rate of Sale (ROS) → How fast stock sells.
Reduce your range, discontinue slow movers, and drive more traffic.
-
Stock Cover → How long your stock will last.
Too high? Pause buying and clear excess stock. Too low? Reorder best sellers quickly.
Turning Numbers into Next Steps
Numbers don’t have to be scary They’re simply a way of showing you where to focus your energy. When you take the time to track key metrics like revenue, profit, conversion rate, rate of sale, average order value (AOV), and stock cover, you stop guessing and start seeing the bigger picture.
The more you understand your small business numbers, the more confident you’ll feel in making decisions that actually move your business forward.
And if you’re still feeling stuck? That’s exactly where I can help (numbers are my jam!) through my Stock & Profit Guidance services as I can help you turn your numbers into clear next steps so you can stop running your business blindly and start moving forward confidently.