"But when establishing criteria for measuring a company's performance, it is important to stay focused on the right things, so less time is spent compiling and more can be devoted to analyzing and taking action," he says. "A focused approach allows management to react more quickly and possibly redirect strategy or operational planning."

Manuel Vegas, business manager at Piston Power, a custom engine shop, applies a laser-like focus on the bottom line. "That's the first number I look at," he says. "Then I look at cost of goods sold, gross profit and the comparative analysis of previous periods."

Vegas pores over those numbers on a monthly basis, and he uses the information he collects to identify trends and spot anomalies, both good and bad. While some of the options available to the nine-year-old company as responsive strategies are limited because of its size and the specialized nature of its business, Vegas believes it's important to translate analysis into action and pursues whatever avenues are available.

"In areas such as expense control, unfortunately, we don't have a lot of options outside of the usual method of shopping for the best price," he says.

"We look for suppliers that can provide us with comparable quality but are less expensive than other suppliers. We also shop for the best rates on medical and general liability insurance," he adds, "and we are diligent about performing routine maintenance on equipment to minimize breakdowns and energy usage."

Keeping the bottom line healthy starts with taking care of the top line, and Piston Power seeks to maximize revenues through additional sales and maintaining its current customer base.

Its core business is rebuilding automobile engines. It offers a full line of machine shop services for the automotive industry and for individuals who want to rebuild their own engines, including grinding crankshafts, boring and honing engine blocks, re-sleeving cylinders and refinishing cylinder heads. It also sells a complete line of engine repair, customization and modification parts.

The custom engines that Piston Power builds for the hot rod and race car segment have brought home the gold in many races, and that translates to positive marketing buzz for the company.

Service is the cornerstone of the company's revenue-growing efforts. "We provide excellent customer service," he says. "We survey new customers to make sure they are satisfied with our products and service, and we closely monitor quality control to minimize warranty claims and customer dissatisfaction."

Shopping for the best rates on medical and liability insurance can help keep costs down.

Another revenue-boosting strategy the company has adopted is converting from a cash-only business to one that accepts credit cards, a move initiated a little more than a year ago, with beneficial results.

It also makes weekly cold-call sales calls to prospective customers, and that has proved to be its most productive method of increasing sales, Stout says. An in-house development project to build a Web site is currently underway as well.

Long-term goals at Piston Parts are to maintain market share and to achieve annual sales growth of 5% to 10%, which Vegas describes as "modest." Going forward, the company will continue to rely on its financial information to help determine if it is remaining on track with its plan.

"We try to provide services and products for our customers that are the best anywhere," Vegas says. Keeping a close watch on the numbers helps the company deliver on that promise.

Healthcare providers differ from other types of businesses in certain ways, but the same basic guidelines apply when it comes to keeping track of a practice's financial health. Revenue, expenses and productivity are the key areas that must be tracked, and that can be done by monitoring a variety of performance areas, such as total gross charges or net revenue per practitioner.

"The numbers I pay most attention to are monthly and daily receivables compared to the same year-earlier periods," says Dr. Dan Duffy, who owns a dental practice with two locations. "I always keep a close eye on the ebb and flow of assets, liabilities and equity, and I use that information to make important long-term decisions."

No matter how big or small a business might be or what stage of development it's in, paying attention to the right financials and metrics can help improve its performance. For Gary Boccio, who started Extreme Graphics, a total printing solutions business, about three years ago, outlays for expenses top the list.

"I use QuickBooks for my accounting, and it's very useful having the numbers right there in front of me," Boccio says. "Besides paying attention to my outgoing spending, I also look at the sales summary, which shows me which areas are generating most of my revenues. It presents everything in a nice pie chart, which makes it easier for me to grasp."

Graphics work for business cards, letterhead and other stationery is Boccio's largest sales silo and, fortunately, his most profitable. At least once a month he reviews the numbers to determine what's moving and what's not. "It also gives me a handle on cyclicality," he says.

Although Extreme Graphics is still a fairly new business, Boccio is already identifying some patterns. For example, October through January appears to be a period of consistently strong revenue and good cash flow, with performance tailing off a bit in the subsequent months. "I look at the full-year numbers because it's important for me to keep track of where I'm headed," he says.

Review the numbers at least once a month to determine what's moving and what's not.

One area where he has chosen not to scrimp, however, is on equipment. "I try to buy new equipment as opposed to used equipment whenever possible," he says. "That reduces the likelihood of repair costs, downtime and the associated lost revenue."

Boccio has invested in a digital printer for Extreme Graphics, and while he has been doing just a small volume of sales with it so far, digital printing, especially of marketing materials, is one area where he hopes to grow his business.