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Understanding your business numbers is essential, but knowing your percentages takes that insight to an entirely new level. Many small business owners can list their monthly expenses, yet few know exactly what percentage of revenue is going toward payroll, rent, or cost of goods sold (COGS). These percentages reveal whether you’re spending too much or too little in certain areas and where you can make improvements.
When you track your percentages consistently, you can identify inefficiencies, compare your performance to industry benchmarks, and understand where your money is actually going. This is one of the most valuable steps any business owner can take to strengthen financial health and long-term profitability.
Why Percentages Matter for Financial Health
Dollar amounts show you what you spent. Percentages show you what those expenses mean for your business.
For example, if you spent $18,000 on payroll last month, that number alone does not tell you much. If you learn that payroll represents 44 percent of your revenue, you now have insight that helps you evaluate staffing needs, pricing structure, and operational efficiency.
Tracking key percentages such as payroll, rent, and COGS helps you:
Understand your financial health at a glance
Identify overspending before it becomes a problem
Set realistic and sustainable budgets
Compare your numbers to industry standards
Make confident decisions about pricing and staffing
Protect your margins and profitability
This is why percentage tracking is one of the most important bookkeeping practices for small business owners looking to stay profitable and competitive.
How Percentage Tracking Turned a Restaurant Around
A restaurant owner recently came to us frustrated that the business was losing money despite strong foot traffic. The owner was reviewing expenses by dollar amount but not by percentage. Once we examined the numbers through that lens, the problem became clear.
Two critical percentages stood out: food cost and labor cost.
When we began working together, the restaurant’s food cost was 39 percent, which was significantly higher than typical industry benchmarks. Labor cost was 50 percent. Together, these two categories consumed 89 percent of total revenue. As a result, the owner was losing 22 percent every month before accounting for rent, utilities, or marketing.
By focusing on these two key percentages, we identified targeted opportunities for improvement. Working closely with the owner, we implemented strategies such as:
Menu engineering to highlight profitable items
Negotiating better pricing with suppliers
Improving portion control
Streamlining kitchen workflow
Creating more efficient employee scheduling
The results were transformative. Food cost decreased to 28 percent, and labor cost dropped to 39 percent. These improvements turned a money-losing operation into a profitable and stable business. The shift proved how powerful it can be when owners understand their percentages and use that knowledge to guide decision-making.
How Visa Business Plans Bookkeeping Helps You Understand Your Numbers
At Visa Business Plans, we believe bookkeeping should do more than organize receipts and reconcile accounts. It should give business owners clarity and confidence. That is why we help our clients define, track, and interpret their percentages. These metrics provide the visibility needed to make informed decisions, strengthen financial health, and support sustainable growth.
When you understand your percentages, you are not just reviewing numbers. You are reading the story of your business and discovering exactly what it needs to thrive.
Contact us today to get started
The information provided in this blog is intended solely for informational purposes. While we strive to offer accurate and up-to-date content, it should not be considered legal advice. Immigration laws and regulations are subject to change, and individual circumstances can vary widely. For personalized guidance and legal advice regarding your specific immigration situation, we strongly recommend consulting with a qualified immigration attorney who can provide you with tailored assistance and ensure compliance with current laws and regulations.
Visa Business Plans is led by Marco Scanu, a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in four different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.
Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital, and high-growth enterprises.
At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based boutique consulting firm providing attorneys and investors with business planning services in the areas of U.S. and Canadian immigration, SBA loans, and others.
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