"We're doing well" is what most owners say when the bank balance is up. It's also the thing most owners say for 12 months before a slow quarter blindsides them. Feeling okay isn't the same as being healthy. Below are 7 yes-or-no checks that cut through the vibe and tell you the truth about your sales performance. Answer honestly — if you can't say yes to at least 5 of them, you've got work to do.
1Why "we're doing well" is a trap
Most business owners judge their health by one signal — is the bank account growing. That signal lags the actual state of the business by weeks or months.
By the time "we're doing well" flips to "something's wrong," the cause has been compounding for a while. A competitor gained ground. A channel stopped working. Close rate slipped by 10 points over six months without you noticing.
These 7 questions pull those hidden shifts to the surface. Run through them quarterly — it takes 10 minutes and tells you more than any P&L.
2Do you know your cost per lead?
Not cost per customer — cost per lead. Every dollar of marketing spend divided by the number of new enquiries it produced last month.
If you can't answer in under 30 seconds, you're flying blind. Marketing is the biggest variable cost most small businesses have, and if you don't track what it produces, you can't cut what's wasted or double-down on what's working.
If no: start tracking lead source. A spreadsheet is fine. One column per marketing channel, one row per month, count enquiries from each source.
3Do you know which marketing brought your last 3 customers?
Specifically. Not "I think most come from Google." Actual names — Sarah came from the Google Ad, Tom came from a referral, Lisa came from the website.
If you can't name the source for your most recent customers, you can't tell which half of your marketing is working. Half of it is always wasted. Without tracking, you're just guessing which half.
If no: ask new customers directly when they book. "How did you hear about us?" One sentence on a form or an intake call is enough.
4Has your close rate improved or declined over the last 12 months?
Of the quotes you sent this month, what percentage turned into jobs? Compare to 12 months ago.
A stable or growing close rate means your sales process is intact. A dropping one means something shifted — pricing, positioning, response time, or a competitor's offer got stronger — and you haven't adjusted. The longer you wait, the more customers walk.
If no: calculate it for the last 3 months vs the same 3 months a year ago. Look for a 5-point swing either way.
5Do you know which customers refer you?
Referrals are the cheapest customers you'll ever get. Most small businesses know referrals happen — few know WHO refers them.
If you don't know who your top 3 referral sources are, you can't thank them, reward them, or ask for more introductions. The referral flywheel works far better when you give it a nudge.
If no: pick up the phone and ask your last 10 customers how they heard about you. Write down anyone who said "my friend X told me." That's your referral list.
6Do you have enough in the pipeline to hit next month's target?
Add up the total value of every open quote, proposal, or prospect you're chasing right now. Compare to next month's revenue target.
Most businesses need around 3x coverage to hit target — not every quote closes. If you're under 2x with 2 weeks to go, next month is going to hurt. You still have time to push enquiries, follow up with dormant prospects, or run a quick campaign.
Businesses that score 5+ out of 7 on a sales-hygiene check grow revenue 2.3x faster on average than those scoring 3 or less, per Harvard Business Review / CSO Insights benchmarks. At Bare Bayside Labs, we run a version of this check with every business we onboard — the gap between "feels fine" and "is actually healthy" is almost always wider than owners expect.
If no: add up the pipeline today. Write the number down. Compare every month.
7Can you say what's changing in your market without guessing?
Did a competitor launch a new service this quarter? Did ad costs in your category go up or down? Is there a new player in your suburb or category?
Most owners find out weeks or months after the fact — usually when their own leads start drying up. Running on 6-month-old market information is expensive.
If no: look at 3 competitors' websites, ad activity, and Google rankings today. Set a reminder to do it again in a month. If that's a chore, that's why ongoing market monitoring exists.
8Do you have a follow-up system that runs without you?
Every lead gets a follow-up email, text, or call at a consistent time — not "when I remember."
A single manual follow-up is worth about 2x what no follow-up is worth. A second one adds another 50% in conversion. Most small businesses do the first follow-up inconsistently and never do the second. Every missed follow-up is a customer who went to someone else.
If no: start with one automated email 48 hours after each quote. One rule. Ten minutes to set up in any email tool.
9How to score yourself
Count your Yes answers.
- 6-7 yes: Genuinely healthy. Your sales process is tracked and defensible. Keep running the checks quarterly.
- 4-5 yes: Fine for now, but with real blind spots. Pick the No answers and fix the easiest one this week.
- 0-3 yes: "We're doing well" is probably hiding a problem that'll surface in the next quarter. Start with lead source tracking (question 1 and 2) — it's the foundation for every other answer.
The score itself matters less than the honest reckoning. Most owners assume they're at 6 or 7 and realise, running through it slowly, they're closer to 3. That's normal. That's the point of the exercise.
72% of small business failures trace back to poor financial and operational visibility, not a lack of effort, according to CB Insights post-mortem analysis of failed businesses. At Bare Bayside Labs, we've never met an owner who was working too little — we've met plenty who were working on the wrong things because they couldn't see the actual state of their pipeline.
Key takeaways
- "We're doing well" is a feeling, not a diagnosis — the 7 checks turn the vibe into a score.
- If you can't answer in 30 seconds, you're not tracking it — and you can't improve what you don't measure.
- Lead source and close rate are the two cheapest fixes — they set up everything else.
- Pipeline coverage under 2x is a warning — act on it before the quiet month arrives.
- Market awareness is a sales metric too — find out what competitors are doing before they take your customers.
- One automated follow-up is worth more than any new ad — start there if you're doing nothing else.
- Score yourself quarterly — the 10 minutes beats a quarter of surprise-bad revenue.
Common questions
How honest should I be?
Brutal. If you catch yourself saying "kind of yes" — that's a no. The whole point is to find the weaknesses, not reassure yourself.
What if I'm a one-person business?
All 7 still apply. The answers might be simpler (smaller pipeline, simpler follow-up) but the checks are the same. Solo businesses benefit most from the discipline because there's no one else to catch the blind spots.
Should I share this with my team?
Yes. The best version of this check is filled out together — you catch each other's assumptions. A sales lead and a marketing lead often answer the same question differently, which is the most useful conversation you'll have all quarter.
How long does fixing a "No" take?
The easy ones — lead source tracking, automated follow-up — take an afternoon. The harder ones — pipeline coverage, market awareness — take 2-4 weeks of consistent effort. None of them take years.
Which question should I tackle first?
Question 1 (cost per lead) and question 2 (where your last 3 customers came from). Both need the same data — lead source tracking. Fix that once and you've answered two questions at the same time.
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