{"id":193236,"date":"2018-08-07T07:41:04","date_gmt":"2018-08-07T14:41:04","guid":{"rendered":"https:\/\/www.nationalfunding.com\/blog\/?p=193236"},"modified":"2023-11-01T11:03:58","modified_gmt":"2023-11-01T18:03:58","slug":"5-financial-metrics-small-businesses","status":"publish","type":"post","link":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/","title":{"rendered":"5 Key Financial Metrics for Small Businesses"},"content":{"rendered":"<p>Predicting fluctuations in the economy may seem like work better left to those trained in the financial arts, but there are actually a few simple ways that small business owners can get in the know. Though no one can truly predict the future, tracking key business indicators and financial metrics for small businesses could help owners see economic changes on the horizon, rather than reading about them in the news.<\/p>\n<p>After all, business owners try not to be taken by surprise. By regularly looking at external metrics and reviewing their\u00a0<a class=\"SWhtmlLink\" href=\"https:\/\/www.nationalfunding.com\/blog\/5-internal-business-metrics\/\" target=\"_blank\" rel=\"noopener noreferrer\">business metrics<\/a> to keep track of how their business is doing, they can prepare themselves for any potential economic challenges that could affect their business.<\/p>\n<p>Which external metrics can give the best hints as to where the economy is heading? There are the ones that are covered widely in the media, like GDP (Gross Domestic Product) growth and unemployment. But there are other, lesser-known metrics that can also give you a good hint as to what&#8217;s to come. Here are five that you should consider watching.<\/p>\n<h2 class=\"\">Baltic Dry Index<\/h2>\n<p>Never heard of it? Don&#8217;t worry, neither did I \u2014 until the last recession. That&#8217;s when an economist friend of mine explained it. It&#8217;s a shipping index of freight prices to move goods through the Baltic Sea, which is one of the world&#8217;s busiest shipping areas. When the index is going up, that means freight prices are going up due to demand and that&#8217;s a good sign. When freight prices are declining, it means that shipping is starting to slow down, which is a bad sign for worldwide economic activity. It&#8217;s been holding steady as of late; you can track it on <a class=\"SWhtmlLink\" href=\"https:\/\/www.bloomberg.com\/quote\/BDIY:IND\" target=\"_blank\" rel=\"noopener noreferrer\">Bloomberg<\/a>.<\/p>\n<h2 class=\"\">ISM Reports on Business<\/h2>\n<p>The <a class=\"SWhtmlLink\" href=\"https:\/\/www.ismworld.org\/about-ism\/overview\/\" target=\"_blank\" rel=\"noopener noreferrer\">Institute for Supply Management<\/a> is an association of purchasing managers across the country. Each month, their members are polled as to their planned purchases and other economic data in their companies. The results are converted into two indexes: one for <a href=\"https:\/\/www.nationalfunding.com\/industries\/loans\/manufacturing-companies\/\">manufacturing firms<\/a> and the other for service firms. Both indexes have been strong over the past year, but of course, a continued decline should raise a few red flags, so keep an eye on it.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"Business owner reviewing financial metrics for small business\" src=\"https:\/\/www.nationalfunding.com\/blog\/wp-content\/uploads\/2018\/08\/thoughtfulbusinessmanwor_584967.jpg\" alt=\"Business owner reviewing financial metrics for small businesses on laptop\" width=\"600\" height=\"400\" \/><\/p>\n<h2 class=\"\">University of Michigan Consumer Sentiment<\/h2>\n<p>Although the Conference Board has its own more widely known metric that tracks consumer confidence, many economists I know turn to the <a class=\"SWhtmlLink\" href=\"https:\/\/www.sca.isr.umich.edu\/charts.html\" target=\"_blank\" rel=\"noopener noreferrer\">University of Michigan&#8217;s Index of Consumer Sentiment<\/a>. It&#8217;s a more thorough analysis of consumer buying trends and attitudes about the country. Let&#8217;s face it: if consumers aren&#8217;t feeling confident and they stop buying, it affects everyone. If you start noticing a decline in this metric, then that should be an indication of potentially challenging times to come.<\/p>\n<h2 class=\"\">NFIB Small Business Optimism<\/h2>\n<p>According to the <a href=\"https:\/\/www.sba.gov\/\">Small Business Administration<\/a>, there are about 30 million small businesses in the U.S. that employ about half of the workers in this country. Obviously, when small businesses are feeling optimistic, that&#8217;s a good sign for the economy. The best way to track their sentiment is by following the <a class=\"SWhtmlLink\" href=\"https:\/\/www.nfib.com\/surveys\/small-business-economic-trends\/\" target=\"_blank\" rel=\"noopener noreferrer\">National Federation of Independent Business&#8217;s<\/a> Small Business Optimism Index.<\/p>\n<h2 class=\"\">Expedia<\/h2>\n<p>This may seem a little off-the-wall, but believe it or not, this metric actually works. The theory is the more consumers are spending on travel, the better the economy is doing. So what better way to gauge than to check out travel site Expedia&#8217;s traffic numbers? Tracking Expedia&#8217;s traffic, particularly over the past few years in a graph, can give you a bird&#8217;s-eye view of consumer spending. I use <a href=\"https:\/\/www.trafficestimate.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Traffic Estimate<\/a> to track website traffic.<\/p>\n<p>By checking the above financial metrics for small businesses and key business indicators at least monthly, you&#8217;ll get a decent idea of where the economy is heading and can adjust your plans accordingly. The future of your business \u2014 and all the people that rely on it for their livelihoods \u2014 could depend on it.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Baltic Dry Index and Consumer Sentiment are just two financial metrics for small businesses that you should be following.<\/p>\n","protected":false},"author":17,"featured_media":193234,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[66],"class_list":["post-193236","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-health","tag-business-growth"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>5 Key Financial Metrics for Small Businesses<\/title>\n<meta name=\"description\" content=\"The Baltic Dry Index and Consumer Sentiment are just two financial metrics for small businesses that you should be following.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 Key Financial Metrics for Small Businesses\" \/>\n<meta property=\"og:description\" content=\"The Baltic Dry Index and Consumer Sentiment are just two financial metrics for small businesses that you should be following.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.nationalfunding.com\/blog\/blog\/wp-json\/wp\/v2\/posts\/193236\" \/>\n<meta property=\"og:site_name\" content=\"The Bottom Line by National Funding\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/national.funding\/\" \/>\n<meta property=\"article:published_time\" content=\"2018-08-07T14:41:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-01T18:03:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/live-nationalfunding.pantheonsite.io\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1440\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"The Bottom Line Team\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@NationalFunding\" \/>\n<meta name=\"twitter:site\" content=\"@NationalFunding\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"The Bottom Line Team\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/\",\"url\":\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/\",\"name\":\"5 Key Financial Metrics for Small Businesses\",\"isPartOf\":{\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/blog.nationalfunding.com\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg\",\"datePublished\":\"2018-08-07T14:41:04+00:00\",\"dateModified\":\"2023-11-01T18:03:58+00:00\",\"author\":{\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/#\/schema\/person\/53a4cab28ed1b2999f27955e55ee5d31\"},\"description\":\"The Baltic Dry Index and Consumer Sentiment are just two financial metrics for small businesses that you should be following.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#primaryimage\",\"url\":\"https:\/\/blog.nationalfunding.com\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg\",\"contentUrl\":\"https:\/\/blog.nationalfunding.com\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg\",\"width\":1440,\"height\":800},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.nationalfunding.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"5 Key Financial Metrics for Small Businesses\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/#website\",\"url\":\"https:\/\/www.nationalfunding.com\/blog\/\",\"name\":\"The Bottom Line by National Funding\",\"description\":\"Read National Funding&#039;s small business blog for tips and suggestions on how to grow your business by focusing on different aspects of business operations.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.nationalfunding.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/#\/schema\/person\/53a4cab28ed1b2999f27955e55ee5d31\",\"name\":\"The Bottom Line Team\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.nationalfunding.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/ad2522aedfa90caae29085ab77097efb7fda54ec3655a924dcf42152f32b34e6?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/ad2522aedfa90caae29085ab77097efb7fda54ec3655a924dcf42152f32b34e6?s=96&d=mm&r=g\",\"caption\":\"The Bottom Line Team\"},\"url\":\"https:\/\/www.nationalfunding.com\/blog\/author\/rochinero\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"5 Key Financial Metrics for Small Businesses","description":"The Baltic Dry Index and Consumer Sentiment are just two financial metrics for small businesses that you should be following.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/","og_locale":"en_US","og_type":"article","og_title":"5 Key Financial Metrics for Small Businesses","og_description":"The Baltic Dry Index and Consumer Sentiment are just two financial metrics for small businesses that you should be following.","og_url":"https:\/\/www.nationalfunding.com\/blog\/blog\/wp-json\/wp\/v2\/posts\/193236","og_site_name":"The Bottom Line by National Funding","article_publisher":"https:\/\/www.facebook.com\/national.funding\/","article_published_time":"2018-08-07T14:41:04+00:00","article_modified_time":"2023-11-01T18:03:58+00:00","og_image":[{"width":1440,"height":800,"url":"https:\/\/live-nationalfunding.pantheonsite.io\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg","type":"image\/jpeg"}],"author":"The Bottom Line Team","twitter_card":"summary_large_image","twitter_creator":"@NationalFunding","twitter_site":"@NationalFunding","twitter_misc":{"Written by":"The Bottom Line Team","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/","url":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/","name":"5 Key Financial Metrics for Small Businesses","isPartOf":{"@id":"https:\/\/www.nationalfunding.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#primaryimage"},"image":{"@id":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#primaryimage"},"thumbnailUrl":"https:\/\/blog.nationalfunding.com\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg","datePublished":"2018-08-07T14:41:04+00:00","dateModified":"2023-11-01T18:03:58+00:00","author":{"@id":"https:\/\/www.nationalfunding.com\/blog\/#\/schema\/person\/53a4cab28ed1b2999f27955e55ee5d31"},"description":"The Baltic Dry Index and Consumer Sentiment are just two financial metrics for small businesses that you should be following.","breadcrumb":{"@id":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#primaryimage","url":"https:\/\/blog.nationalfunding.com\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg","contentUrl":"https:\/\/blog.nationalfunding.com\/wp-content\/uploads\/2018\/08\/stockmarketindicatorandf_578649.jpg","width":1440,"height":800},{"@type":"BreadcrumbList","@id":"https:\/\/www.nationalfunding.com\/blog\/5-financial-metrics-small-businesses\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.nationalfunding.com\/blog\/"},{"@type":"ListItem","position":2,"name":"5 Key Financial Metrics for Small Businesses"}]},{"@type":"WebSite","@id":"https:\/\/www.nationalfunding.com\/blog\/#website","url":"https:\/\/www.nationalfunding.com\/blog\/","name":"The Bottom Line by National Funding","description":"Read National Funding&#039;s small business blog for tips and suggestions on how to grow your business by focusing on different aspects of business operations.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.nationalfunding.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.nationalfunding.com\/blog\/#\/schema\/person\/53a4cab28ed1b2999f27955e55ee5d31","name":"The Bottom Line Team","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.nationalfunding.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/ad2522aedfa90caae29085ab77097efb7fda54ec3655a924dcf42152f32b34e6?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/ad2522aedfa90caae29085ab77097efb7fda54ec3655a924dcf42152f32b34e6?s=96&d=mm&r=g","caption":"The Bottom Line Team"},"url":"https:\/\/www.nationalfunding.com\/blog\/author\/rochinero\/"}]}},"_links":{"self":[{"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/posts\/193236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/comments?post=193236"}],"version-history":[{"count":11,"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/posts\/193236\/revisions"}],"predecessor-version":[{"id":207323,"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/posts\/193236\/revisions\/207323"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/media\/193234"}],"wp:attachment":[{"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/media?parent=193236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/categories?post=193236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationalfunding.com\/blog\/wp-json\/wp\/v2\/tags?post=193236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}