First, Remember, what you cannot BE WITH, rules you…. So we want you to be able to, from where ever you are financially, make LOTS more of it… but the only way to do that is to be able to BE WITH YOUR MONEY SITUATION, whatever it is RIGHT NOW. 

Let’s, figure out where are you?  How…list what you know:

 What does each product or service cost you?

How much profit margin do you have on each product?

What is your overhead (technology, rent, employees, etc.)?

What is your average monthly cash flow and expenses?

Is your cashflow seasonal?

How much inventory do you carry at any one time?

Many of you will have your financial information in your head.  More times than not this is the true story…but what if it is not?  What if the numbers show another story?

What tools do you need to be intimate with these figures:

You will need one place to collect all of the companies financial details.  That can be as simple as a ledger book, an excel spreadsheet or a software such as QuickBooks.  Once the details are input you will be able to extract the following reports.

                Basic Income Statement (

                       An income statement or financial statement measures a company’s financial performance over a specific accounting period by summarizing the revenue less expenses perfomance. It also shows the net profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year.              

                Income by customer/type

                   When recording sales in your accounts receivable you will group them by type (groups); customer, cash, credit card etc.  By breaking them into groups you can run reports helping you recognize cash flow by customer and type of sale.  Let’s take an example… you have a customer that you spend a lot of time working with, however, they do not purchase as much from you as let’s say another customer.  You may choose not to work with the customer that consumes your time but look to attract more customers that purchase the higher profitable product with less work.

                Expenses by vendors/type of expense

                    When recording your expenses either in accounts payable (accrual basis) or as you pay your expenses (cash basis) you will want to monitor them by the vendors who provide the product or service to you.  This may help you negotiate a price break or a better delivery time.  When negotiating, review your vendor history, what have spent with them over the last several months/years?  Also you may plan to increase your volume by ___% over the next 12 months – with that in mind they may consider favorable pricing for you.  You might even consider or offer that you use them exclusively.

                 Standard Balance Sheet (

Assets = Liabilities + Shareholders’ Equity

  •  Assets – checking account, inventory, accounts receivable
  • Liabilities – Bank loans, accounts payable, credit cards
  • Shareholders Equity – Past year profits/losses, loans to the company from owner/partners

 Basic Profit & Loss or P&L Statement    (

           Summarizes Revenue = Income less Expenses (costs of goods sold and operating expenses) resulting in a profit or loss analysis.

How do we know that these numbers are accurate?  You tie them to your bank statements a third party.  This is a good accounting principle as they have no interest in your business hence their statement is considered a third party audit so to speak of your account.  They too are doing an accounting of your cash for a different reason.  Remember if you have a petty cash, cash drawer etc. that too will need to be counted monthly to record the revenue and expenses flowing through it. 

If the numbers confirm what you have calculated or gathered in your mind than you are validated in your thinking. This will be an excellent foundation to plan for the future; new services, marketing, recognize your niche etc.  Maybe you have been extremely successful with one product you analysed – now can you apply that knowledge to your other products or services?  Or can you take that lesson and realize that another product may never be profitable?

If the numbers do not confirm your thoughts it is a good time to consider a new beginning or belief.  In the accounting world we say that numbers do not lie….they tell a story.  For instance we may have one product or service that makes all of the profit in the company. So we may focus all of our marketing efforts and process streamlining on that product.  This may in turn allow us to work less, make more or better yet do the fun thing in our business that we are passionate about even though it is not the money maker.