When it comes to running a business, you have to know your numbers, says Marcus Lemonis, star of CNBC's "The Profit."
The serial entrepreneur, who puts his own cash into struggling businesses and tries to turn them around, would know. At this point, he's invested about $35 million in companies featured on the show.
Regardless of the size of your company, every business owner needs to know three numbers, Lemonis says:
1. Your annual sales revenue, "based on a trailing 12 months, not the calendar."
2. Your gross profit margins.
3. And your expenses as a percentage of your gross profit — "not a percentage of your sales. You pay your bills with gross profit — not with revenue."
Not knowing these numbers is one of the biggest mistakes Lemonis sees entrepreneurs make.
It's also one of the most common mistakes — and not just for small business owners. "I've met plenty of Fortune 500 company CEOs that don't know their numbers," Lemonis told CNBC. "They say, 'Oh, I have other people to do that,' or, 'My CFO knows that.'"
That doesn't cut it. If you want to run a successful business, you have to know your revenue, gross profit and expenses "inside out," Lemonis said.