Are You Avoiding Your Numbers? Let’s Talk About Why That’s Hurting You

Those dry columns and rows of numbers? They’re the vital signs of your business. You’d want to know if your blood pressure was dangerously high, wouldn’t you? Or if that random dizzy spell meant something serious?

Well, getting a handle on your financials can be just as life-changing for your business—in a very good way. And I promise, it’s not as painful as it seems.

The Payoff of Understanding Your Financials

Taking the time to regularly review your business’s performance can change everything. Here’s what you’ll gain:

•  No more flying blind: You’ll know exactly where you stand and have a clearer picture of where you’re headed.
•  Spot patterns early: You’ll catch opportunities to improve and avoid disasters before they strike.
•  More confidence: Understanding your numbers will make you a stronger business owner.
•  Increased profitability: You’ll make better financial decisions, which often leads to more profit.
•  Better team retention: With higher profits, you can offer competitive pay and benefits, which is huge given today’s hiring challenges.
•  A more valuable company: If you ever decide to sell, your business’s value will be based on clean, profitable numbers.
•  Peace of mind: You’ll sleep better knowing there’s no hidden financial crisis lurking around the corner.

Mastering the P&L

I know the Profit & Loss statement (P&L) can feel intimidating. Seeing your team’s hard work reduced to numbers is tough at first. But trust me, learning to read your P&L is a game changer.

Think of your P&L as your business’s health report. It shows you:

1. Revenue (sales coming in)
2. Cost of Goods Sold (COGS: labor and materials)
3. Gross Profit (revenue minus COGS)
4. Expenses (rent, utilities, wages, insurance, etc.)
5. Net Profit (what’s left after expenses)

Make it a habit to review your P&Ls monthly. Check both cash and accrual basis reports. Cash basis tells you when money is coming in or going out. Accrual basis shows when revenue is earned and expenses are incurred, regardless of when the cash moves.

Get Your Team Involved

You can’t do this alone. Job costing should be a team effort. Look at a P&L for every major project—mitigation, rebuild, whatever—and make it a routine to review the numbers regularly with your team. Hold someone accountable for the budget on every job and make sure they understand how their performance affects the company’s bottom line.

Make Sure the Money Flows

Do you have a collections system in place? Or is it chaos every time the bank account gets low?

A solid process covers everything from prompt invoicing and regular follow-ups to tracking cash flow and pausing work if payments are delayed. It’s about staying on top of things, not scrambling when it’s almost too late.

Where to Go from Here

Think about how you can start implementing some of these ideas. Set a few small, achievable goals. Reach out to industry friends or an experienced consultant to compare notes. The sooner you get familiar with your numbers, the more control you’ll have—and the more profitable you’ll be.

Post-It Note Version: Master Your Financials

1. P&L Basics
   Revenue | COGS | Gross Profit | Expenses | Net Profit
2. Review Both
   Cash & Accrual P&Ls monthly. Know the difference.
3. Spot Patterns Early
   Address issues, make improvements, and increase confidence.
4. Involve Your Team
   Job costing = team effort. Hold someone accountable for every job budget.
5. Manage Cash Flow
   Solid collections process: invoicing, follow-ups, pause triggers.
6. Set Small Goals
   Start simple. Track progress. Celebrate wins.

Take Control. Get Profitable. Sleep Better.