5 numbers every Wyoming small business owner should check monthly.
Most Wyoming small business owners I have talked to track two numbers: revenue and bank balance. Both are important. Neither tells you whether the business is healthy.
Here are five numbers that will tell you the truth. None of them require an MBA, software you do not already have, or your CPA on the phone. They take about an hour to pull the first time and fifteen minutes a month after that. If you only check them every quarter, you are still better off than 90% of WY SMB owners.
1. Days of cash on hand
Take what is in your operating account today. Divide it by what you actually spend in an average week, including payroll and your own draw. Multiply by 7. That is your days of cash on hand.
Under 30 days means you are running on credit cards and good fortune. 30 to 60 days is the WY median for SMBs and is uncomfortable but workable. 90 days is where a real cushion begins. If you operate seasonally (tourism, ranching with calf sales, oilfield services with cyclical contracts), the number you actually need is higher. A Jackson lodge that hits January with 60 days of cash is in a different position than a Casper trades business that hits January with 60 days of cash.
The action when the number is low: cut the slowest paying customer terms before you cut anything else.
2. Gross margin trend, 3 month rolling
Take revenue minus cost of goods or direct labor and materials. Divide by revenue. Do it for the last 3 months. Then look at what the same 3 months looked like a year ago. The trend matters more than the absolute number.
A flat margin trend in an inflationary environment is actually a margin loss. You held the line on price while costs rose, which means you absorbed the cost. A 2 point margin drop year over year on a $1M business is $20K of profit you no longer have. That is the difference between paying yourself an extra month or not.
The action: raise prices on the bottom quartile of jobs or SKUs first. The customers who are hardest to please at low prices will be just as hard at higher prices and you will lose the right ones.
3. Top 3 customer concentration
What percentage of your revenue comes from your three biggest customers. Pull last 12 months, add up the top three, divide by total revenue.
Under 25% means you are diversified and durable. Between 25% and 50% is normal for Wyoming SMBs and means you should know exactly what those three customers think about you. Over 50% means you do not own a business, you own a job with a high salary cap and a low salary floor.
The action: pick the top customer. Find out what would have to change for them to leave. Then build the relationship and the contract around closing that gap.
4. Single industry exposure
Wyoming SMBs almost always lean on one industry: energy, ag, tourism, government. The energy basin specifically has eaten a lot of Wyoming businesses over the last two decades by being too good for too long, then turning.
Calculate what percentage of your revenue depends on a single industry. Not a single customer, a single industry. A Gillette welding shop with 12 different customers all in coal services has 100% single industry exposure, not 8% per customer.
Under 40% is durable. 40% to 70% is workable but should be monitored every quarter. Over 70% means you are riding the same wave as everyone else in the basin. When the wave breaks, your numbers and your competitors' numbers break at the same time.
The action: do not try to diversify into industries you do not understand. Instead, ask which of your current customers are in adjacent industries you can serve with the same crews, the same equipment, or the same skill set. Diversify sideways before you diversify outward.
5. True hourly cost of owner labor
This is the one almost nobody calculates and it is the most important number on this list.
Take what you paid yourself last year, including draws, distributions, healthcare you ran through the business, vehicle, phone, anything you would have to pay for personally if the business went away. Add about 25% to that number for what you would actually owe in self employment tax and benefits if you were paying retail. Divide by the hours you actually worked. Not the hours you billed clients. The hours you worked, including the ones you spent on the phone Sunday night talking to a foreman.
For most WY SMB owners that number comes out to somewhere between $15 and $40 an hour. A foreman makes more. A welder makes more. That is fine if you are buying equity in the business by underpaying yourself now. It is not fine if the business is not actually growing the equity you are buying.
The action: if you are under $40 an hour and the business is not growing fast enough to justify that, you are not running a business. You are running a hobby that pays slightly better than a hobby. Time to either raise rates, fire a customer, hire help, or admit the math and shut it down.
How to get all five calculated quickly
You can do this yourself. It takes about an hour with a spreadsheet and your bank, P and L, and AR aging report.
Or you can run the free Wyoming Business Diagnostic. It pulls these five numbers and about 30 more, and hands you a written blueprint the same day. Free for the first 50 WY owners. If you found this post and are an owner, you qualify.
Either way: do the math. Once a month, every month, like clockwork. The owners who do this are the ones still running the business in 5 years.