The Power of Knowing Your Numbers

You built this business with your bare hands, with your

smarts, and with sheer effort.

You can fix almost anything that comes your way.

You can solve complex customer problems with a smile, but when it comes to your

own business numbers, yeah, there's a pit in your stomach Maybe the spreadsheet

feels like a foreign language written in a code you can't even begin to crack.

Or maybe just maybe you don't even have a clear picture of what's

truly going on financially beyond what's in your checking account.

That feeling of not knowing of operating in the dark, that's exhausting.

It's a constant low level hum of anxiety.

It leads to missed opportunities.

It leads to wasted money and a deep seated fear that you're

missing something critical.

Something everything you've worked so hard for.

What if understanding your numbers wasn't a chore?

What if understanding it wasn't a source of dread, but in

fact was your greatest power?

What if it was the key to unlocking true control, undeniable confidence, and

finally, the peace of mind you deserve.

Well, stay with me because we're gonna face this dragon

on the show together today.

Hey there.

Welcome back to Grit and Growth Business.

I'm Ralph Estep Jr. And if you join me last time, we talked about

the uncomfortable truth that your business model might be the very thing

holding you back and how to start diagnosing if your core structure

supports your life and your growth.

Well, this week we're gonna get into another area that can feel incredibly

intimidating for many small business owners, but listen to me, hear me on this.

This is absolutely crucial for regaining control.

Building confidently, and that's the power of knowing your numbers.

Now I know what you might be thinking.

Numbers, Ralph, that's your job.

I started this business to build Ralph.

I created to serve, not to stare at spreadsheets and calculate profit margins.

And I completely get that.

I truly do.

For many of you, the thought of digging into financial statements

brings on a headache or, or even worse, a sense of dread.

And yeah, you might have tried it once or twice and you felt completely

overwhelmed by the jargon in the columns, and you just shoved it aside,

hoping it will all magically work out.

' cause sometimes it's just easier to focus on getting next client, isn't it?

And you're not alone and feeling that way.

Many gritty hands on entrepreneurs thrive on doing the work on those

tangible results, not crunching the numbers, but here's the painful truth

that I've witnessed countless times over my 30 years as an accountant over

my 30 years as a coach and as a fellow business owner, and hear me on this.

Operating your business without a clear understanding of its financial heartbeat.

It's like trying to navigate a dense fog in a car without a dashboard.

Yeah, you're moving, you're busy, but you've got no idea how fast you're really

going or if you're about to run out of gas, if your engine is overheating

or if you're heading straight for a wall or maybe even over a steep cliff.

This kind of uncertainty is a constant source of stress.

It breeds questions like, am I charging enough?

Can I afford to hire Where is all the money going?

It leads to missed opportunities because you're too scared to take

a calculated risk, and ultimately, here's what it does ultimately.

Ultimately, it limits your growth.

It keeps you smaller, more stressed, and less profitable than you could be.

Here's the truth.

I've seen incredible businesses run by incredibly talented people.

People like you, people like plumbers, people like bakers,

people like landscapers, designers.

All of them struggle or even fail, not because they weren't

brilliant at their craft.

They were, but because they ignored their numbers.

Yeah, they were busy.

Their phones are ringing, but they weren't profitable.

They had revenue coming in, but no positive cash flow.

They chased every dollar, but didn't know the true cost of getting it or the true

cost of even delivering those services.

And that, my friend, that's a painful and truly painful, frustrating place to be.

And unfortunately, I've seen it way too many times with small

business owners stuck right there.

So you're asking Ralph, what are the stress points that come from

operating without that vital knowledge from not knowing your numbers?

Let's identify some common ones because chances are you

felt at least one of these.

The first one is this.

Busy but broke.

It's a cycle.

This is the most common and perhaps the most demoralizing that you can experience.

Your calendar is packed.

You're working 60, 70, even 80 or 90 hours a week.

You're constantly doing something, but when you look at your bank account

or what's left for you at the end of the month, just doesn't add up.

You've worked your butt off, but after all of these hours and all that effort.

There's nothing left this pain is deep frustration, and it's a sense

of being trapped on a hamster wheel.

You don't know why you're broke despite being busy, so you just work harder

and harder, which only compounds the exhaustion and the stress.

Yeah, that wheel keeps spinning faster, but you're not moving forward at all.

You might think, Hey, I just need more sales, but more sales

on a broken financial model.

Let me tell you something that just means more work for the same, or hear

me on this one, or even less profit.

And this is a common trap I've seen with so many small business owners.

And guess what it leads to, it leads to complete exhaustion and

a lot of times potential burnout.

How about this one?

Guessing on pricing and profitability?

Let me ask you this and be honest.

How do you price your products or services?

Are you just pulling a number outta thin air?

Just, Hey, Ralph, this worked.

Just matching your competitors.

Are you afraid to charge what you're truly worth because you'll lose those bids?

That pain is immense, isn't it?

See, you're constantly worried.

You're either leaving money on the table or worse and hear me on this one too.

You're losing money on every job because you actually don't know your true costs.

You don't understand your time, your materials, or your overhead.

And this guesswork will slowly but surely erode your entire business

one underpriced job at a time.

It's business death by a thousand cuts, and it also just

chips away at your confidence.

Again, I've seen this completely destroy many small businesses.

Then there's this, I call it the nightmare of surprise bills and cash flow crisis.

You feel like you're constant playing whack-a-mole with your money.

Suddenly a large quarterly tax bill comes due or equipment breaks

down, or a big material order arrives and you're just scrambling.

You're stressing, maybe even dipping into personal savings or taking out

one of those high interest loans.

And you know what?

The pain is here.

The pain here is this constant financial anxiety, a feeling of being reactive.

Instead of being proactive and the absolute lack of control over your

own money and it spills over into your personal life, it affects your

sleep, it affects your relationships.

And listen, I've seen this decimate both a client's business finances as

well as their personal finances, and it leads up to business failure and in

many cases, yeah, personal bankruptcy.

And finally, there's this one.

There's just no clear path for growth or investment.

You have dreams for your business.

You wanna hire another person to take some of the load off.

You need new equipment to be more efficient.

You can see it in your own mind.

You wanna expand into a new service or expand into a new

market, but you've got no data.

You've got no concrete numbers, you've got no business plan.

Yes, you've got great ideas, but you've got no roadmap to support these decisions.

And you're asking yourself, you just don't know if you can truly afford it

or if it'll even pay off in the end, much less try to get financing for it.

And so many of those people just throw the dice, Hey, take the risk.

And sometimes they lose big or the other obviously do nothing,

and they stay in this persistent state of business paralysis.

I bet you felt this pain here before too, and that that pain here is

stagnation, a feeling of being stuck.

You're unable to take those calculated risks that lead to

real growth because you're blind.

Your vision for your business is stifled.

You're frustrated, your motivation is deflated, and you just stop even trying.

So let me ask you a tough question right now.

Do any of these describe your current situation?

I bet it does, or, I bet it has at some point.

And listen, I want you to hear this because I fully support you.

These situations are not personal failings, my friend.

They're not.

These are direct consequences of not having a grasp on your numbers, but

you're ready for the beautiful truth.

The beautiful truth is this, and you need to hear this.

The absolute truth is you can gain that grasp.

It's not about becoming an accountant overnight, it's about getting

clarity on a few key numbers that actually matter to your business.

Yes, I'll keep my job, but you've gotta learn a few items.

And yes, I will teach you.

Let's start the lesson for today.

Are you ready while school is in now, let me start by saying this, the power of

knowing your numbers isn't about dread.

It's about shifting from fear.

To control and shifting from anxiety to confidence.

And lastly, from stagnation to courage, it's about empowering

you to start making decisions that genuinely move your business forward.

They reduce your daily stress, and ultimately, the ability to more profitable

and sustainable business that truly serves you instead of you serving your business.

Let's think back to our analogy of driving in the fog.

Think of your numbers as your business's dashboard now.

Right now, maybe it's dark or half the lights are out, but imagine seeing that

fuel gauge, that speedometer, that engine temperature all clearly visible now.

Well, that's the power we're talking about.

So now you're asking, okay, Ralph, I get it.

You've convinced me.

What's the next step?

Well, here are some concrete, actionable steps that you can take this week

to start harnessing this power.

Are you ready to take some notes?

And don't worry, I'll tell you how to get my action sheet later in the show.

First thing you've got to do, number one thing, start tracking all your

income and expenses, no excuses.

This is foundational.

It needs to be non-negotiable.

Don't think about categories perfectly yet.

Just get it down.

Every dollar that comes in.

Every dollar that goes out, you can use a simple notebook.

You can use pen and paper.

You can use a basic spreadsheet.

Yeah, and you can get an app like Wave, or you can get a app like

QuickBooks or Excel, doesn't matter.

Or you can even use your banking apps, tracking features.

Think about the goal here.

The goal is to simply record the transaction.

Here is a truth that you need to hear today.

You can't manage what you don't measure.

As I always say, what gets measured gets done, and this simple act will

immediately start to reveal patterns and give you a sense of control.

So just start and hear me.

Start today.

Now, once you're collecting that data, it's time for step number two.

And step number two is identify your top three revenue streams

and your top three expenses.

Now, once you've got a few weeks of that basic tracking, look at

where your money is really coming from and where it's really going.

Let's talk about revenue first.

You know, the sales, the, the money that's coming in.

Ask yourself.

Is it from a specific service?

Is it from a particular product or maybe a certain type of client?

What are your biggest earners?

Because this information is information you've got to know.

Now, let's flip it over to expenses.

You know, the money going out.

Is it rent?

Is it materials?

Is it specific software?

Maybe for you it's wages or those marketing expenses.

Ask yourself this.

What are your biggest drains?

What are those things that are draining you on the expense side the most?

And guess what?

You might be generally surprised.

But you won't know them until you start tracking this data.

It floors me just how many business owners only source of

information about their business is their checking account balance.

So many people come in, Hey Ralph, I've got money in my bank.

I must be making money.

What's in the bank?

What's the account balance?

And while that is a critical part, listen to me.

It doesn't tell the whole story, but.

Focus in on these few key areas can give you immense leverage to make quick,

impactful changes in your business.

For example, if you see one service line is incredibly profitable, you can ask

yourself, how can you market that more?

Or if you've got one expense category that is ballooning, ask

yourself, where can you trim?

Alright, so we've, we've listed this stuff, then we

found our, our heavy hitters.

Now it's time to really do some analysis.

Now it's time to calculate what is called your breakeven point, and

that's where we're gonna start it.

We're gonna start it simply, and the breakeven point is that

point where the money coming in equals the money going out.

That's what we call your breakeven point, and this number is critical.

This is one of the key numbers you've got to know.

And this doesn't have to be some complex accounting exercise,

but this is a crucial number.

Just add up all your fixed monthly costs.

You know the stuff you pay regardless of how many jobs you do.

Things like rent or insurance or your salaries, utilities, fixed software

subscriptions, all those fixed costs.

Then I want you to think about your variable costs.

Those are the costs per unit or per project.

These are things like materials or maybe subcontractor fees for that specific

job, and now I want you to just estimate how much revenue you need to generate

just enough to cover those costs.

Because here's the truth, knowing this number gives you a clear target

each month or quarter, it instantly tells you if you are busy, just

to break even and hear me on this.

Or if you're truly busy for profit and this understanding, this one number can be

incredibly empowering and it can reduce so much of that underlying financial anxiety.

Are you ready for it?

Here's my key takeaway for this week.

This is the vital plan to get and measure your numbers, and it's a

pretty simple, I want you to schedule a weekly, what I call numbers, check-in,

treat it like a critical appointment.

Listen, you schedule client meetings, you schedule project deadlines, and you

schedule marketing efforts, don't you?

Well, this is just as important, arguably even more important.

So right now, block out 15 to 30 minutes each week to review your income.

Review those expenses and check on your break even point.

Put this weekly check in on your calendar.

Make it non-negotiable.

Make it part of your routine.

Why?

How does this help?

Well, here's why.

This consistent low stress engagement with your numbers will transform

them from this scary monster into something that's manageable and helpful.

It becomes a manageable and helpful tool.

Tools make your business easier and tools make your efforts more

efficient and more effective.

And you're going to build confidence.

You're going to notice trends, and you're going to make smarter decisions

proactively rather than reactively.

You're going to stop putting out fires and actually start operating

your business strategically.

And listen.

I know diving into numbers can feel like facing a dragon.

You might tell yourself, I'm not good at math, Ralph, or I don't have time, or,

I don't wanna see the bad news, but let me tell you something, friend, you are

good enough and here's some tough love.

You really have no choice.

You've got to master your numbers or you will fail.

Your business will close its doors and your dreams will be completely dashed.

See, most business advisors won't tell you that, but I'm telling you

straight up, here's the truth, and this is the good news of today.

It's not about being a math wizard, it's about being courageous enough to

look, because the truth, even if it's uncomfortable at first, is always less

painful than the anxiety of the unknown.

And by looking.

You take away its power.

Knowing your numbers is like giving you a map and a compass in a dense fog.

It'll illuminate your path.

It shows you where the dangers are, and most importantly, where the opportunities

for true growth and freedom really lie.

See you've got the grit to build.

Now let's just give you the insight to build smart, to build strategically

and with ultimate confidence.

And as I promised to help you get started on this powerful journey, I've created a

simple action plan sheet for this episode called The Power of Knowing Your Numbers.

This free downloadable sheet will guide you through those

crucial first steps of tracking.

Identifying key figures and setting up your essential weekly numbers.

Check-in.

Listen, it's a practical tool to help you transform financial dread into

financial power, and you can download it right now by visiting our website.

That's Grit and growth business.com.

Again, that's grit and growth business.com.

Download the action plan sheet and take that powerful first step towards

mastering your finances and do it today.

You are an expert at your craft.

You are an expert at your service, and you are an expert at building your business.

It's time to become an expert at understanding its

financial health as well.

It's not about being a perfect accountant, but it is about being

an empowered business owner.

See, this is where real control and real growth begin.

You've got this.

I'm here walking alongside you, so thank you for joining me

on Grit and Growth Business.

I'm committed to bringing you honest conversations and practical strategies

every week, just like today to help you build your business the right way.

Now, next week, we're gonna build directly on this financial foundation.

As we discuss this, fix your foundation.

Before you scale we'll explore why trying to grow too fast on a weak base.

Listen, it's gonna lead to collapse and how to ensure your business is truly

ready for that sustainable expansion.

That's the next tool you need for your business toolbox.

So you make plans to join me again next week and don't forget to download your

free action plan sheet for this episode.

Again, that's at grit and growth business.com.

So until next week, my friend, God bless you, you've got the grit.

Now let's get to that growth.