Know Your Numbers or Risk Losing Your Business

Most business owners think they know their numbers — but if you’re only watching sales and your bank balance, you could be making decisions based on the wrong information.

They are either tracking nothing or tracking the wrong things.

In this episode of How to Win Big at Business, Joe DiChiara CPA breaks down the key numbers every self-employed professional and small business owner should be monitoring on a regular basis. This is not about drowning in reports or obsessing over random data. It is about knowing which numbers actually help you make better decisions, reduce stress, spot problems early, and build a stronger business.

Joe explains why checking your bank balance is not enough, how to think about revenue, lead flow, conversion rate, cash reserves, pipeline value, client concentration, and capacity, and why a simple KPI dashboard can help you see trouble coming before it becomes a crisis.

If you want to stop guessing and start leading your business with clarity, this episode will help you focus on the numbers that matter most.

In this episode, Joe covers:

•  Why bank balance is a terrible way to run a business 
•  The difference between tracking too little and tracking too much 
•  The weekly and monthly numbers that matter most 
•  How lead flow and conversion rate affect sales 
•  Why cash reserves reduce business stress 
•  How to measure pipeline value and identify risk 
•  Why client concentration can quietly hurt your business 
•  How capacity and utilization reveal when it is time to hire or delegate

If you’re a self-employed professional trying to build a real business, this podcast was created for you.

New episodes break down the systems, strategies, and structures needed to move from solopreneur to sustainable business owner.

Subscribe to our YouTube Channel

https://www.youtube.com/@Bedrock360BusinessSolutions/featured

Thanks for listening!

If you want fewer headaches, fewer IRS surprises, and more smart systems running your business (so YOU don’t have to), let’s talk.

Book a strategy call: www.timewithjoe.com

Because running a business shouldn’t feel like wrestling an octopus… alone. 

Also check out:
www.Bedrock360BusinessSolutions.com (Complete Coverage)

www.Bedrock360TaxSolutions.com (Tax Guard 365) 

www.Bedrock360BusinessTraining.com (Courses)

#SmallBusiness #KPIs #BusinessGrowth #CashFlow #Profitability #SelfEmployed #Entrepreneurship #BusinessStrategy #FinancialClarity #Dashboard

Thanks for listening!

If you want fewer headaches, fewer IRS surprises, and more smart systems running your business (so YOU don’t have to), let’s talk.

Book a strategy call: www.timewithjoe.com

Because running a business shouldn’t feel like wrestling an octopus… alone. 

Also check out:
www.Bedrock360BusinessSolutions.com (Complete Coverage)

www.Bedrock360TaxSolutions.com (Tax Gaurd 365) 

www.Bedrock360BusinessTraining.com (Courses)

Transcript

SPEAKER_00 0:05

What gets measured can get improved. What doesn't get measured is very difficult to improve. Many business owners don't track anything, or they track too many things and never the right things. I've seen too many business owners try to run their business by looking at the balance in their in their bank account or just look at sales. That could be very, very misleading. You need to have a great solid source of financial facts and figures to run your business efficiently, effectively, and profitably. There's an old saying, and every successful business owner will attest to this. Know your numbers. Welcome to How to Win Big at Business, episode number 17. My name is Joe DeCara, CPA, lifelong entrepreneur. And this podcast was created, obviously, by me specifically for self-employed professionals. Because I was a self-employed professional for decades. And when I mean self-employed, I mean solo employed. No, no team, no, nobody but me. I was the chief cook and bottle washer. There were a million things to do, and all of them were a priority. I did my website, my social media, everything. Well, that's all changed when I started to learn how to go from owning a job to owning a business. And that's what this podcast is all about. If you're a self-employed professional, you're in the right place. And today we're going to talk about what numbers a business owner needs to monitor, how often, why they need to know it, why they need to monitor it. And taken from my last episode when I talked about the becoming a virtual CFO, if you're an accountant, you really got to listen to the episode number 16. If you're a business owner, you got to listen to number episode number 16, because it's all about the numbers. Not the historical numbers, but being able to look at the numbers in a way that will help you make decisions, run your business, know what your cash flow is, not just by checking your balance. She didn't have any money in her account. She didn't understand why. Because when she left, she checked her balance and there was money in there, not taking into account that she had written checks and they hadn't been cashed yet. So that in a nutshell is is how most small businesses run their business. And for a lot of reasons, that's not the right way to run your business. So let's talk about some of the numbers that matter most. Number one is weekly revenue. You want to have a handle on what your sales are weekly. Now, one of the things that I talked about, not in depth. I think I'm going to do another episode on a KPI dashboard. But I started this at the suggestion of my last coach over five years ago. I started keeping track of all kinds of numbers. I don't keep track of weekly because my business is more on a monthly basis. But if you're in like, let's say a retail business, a car repair business, you want to be on a weekly basis. So that that's number one. You want to mark, keep track of your weekly revenue. Now you may find that it could be seasonal. There could be I'll give you an example. I my podcasting coach, he found out that, hey, for some reason in May, I hit like a wall. No new leads, no new leads coming in, couldn't make appointments with people, couldn't close. And I said, Well, welcome to the business world. It's good that you recognize this uh this trend now because there's never nothing to do. There's never nothing to do when you own a business. If you want to talk about trends, try to become an accountant. You know, we just got done, it's April 17th now. April 15th is the world-famous uh tax deadline for all the people that procrastinate. That that's a whole nother story. So between February 1 and April 15th is like 50% of every accountant's revenue. So you're talking about what is that 10 weeks out of 50. So 50% out of 20% of the year. That it's not easy to structure a good business that way. So you want to identify the the trends, lead flow. Another thing I I had to explain to my client was you need a constant stream of leads. You don't just get sales, like you don't just say, oh, my sales are down. Well, your sales are down probably because you don't have enough regular leads, and you probably don't have enough leads because you're not prospecting. So for bedrock, what we do is just about every month we have some kind of event, a free workshop, a free course. We we have tons, tons of leads. We're getting referrals like we never got them before. How? Because I meet with a lot of people, I let them know that we're always looking for clients. So we have a constant stream of qualified leads. Conversion rate. I had a mentor once, and I said, You know, I'm not I'm not closing any any deals, I'm not getting any new clients. And she said, Well, who are you talking to? And I said, Well, nobody really. You know, it might seem obvious, it's kind of funny now, but if you're not talking to anybody, how are you generating leads? So I had to create a whole bunch of different mechanisms. So that's another thing. I don't have one sales funnel, we have several, and they're all fluid, they're they're all being tweaked. We're then we come up with another one. We have seasonal sales funnels. So, you know, October, November, we're doing something on educating people about their taxes. At the end of tax season, we're we're doing something about all the people that got screwed during tax season. So you need a constant stream uh of leads. And and not only that, from all the people that that you're talking to, all of those leads, how many are converted? So you want to know what your conversion rate is, your cash position, how many months worth of of expenses do you have in the bank? You you can't run your business by looking at your bank account. You need to have reserves just in case, because it's not if the shit hits the fan, it's when. You know, there's a quote, there's a book called uh The Road Less Traveled, uh, by a guy named, I forget his full name, but I believe it's Dr. Peck. And I think in in the intro, it was enough for me. I read the whole book several times. Great book. Uh, but in the intro, he says, basically, I'll paraphrase it. Basically, he said, Life is tough. Once you figure out that life is tough, you can have a good, happy life. You know, that that's that's the truth, and and it's more true in business. Business is tough. Once you realize that it's not like God is punishing you because you decided to go into business. No, if it was easy, there wouldn't be so many business failures. That's the truth. Your pipeline value. So if you have a developed sales funnel, you should know how many people you have in the pipeline and where are they? So, a good sales funnel, you know, at the beginning, that's the prospecting that's the lead generation. Then the trick is to get somebody to convert into a paying customer or client. How do you do that? You sell them something for high value but very low cost. Not cheap, but you give them something that's gonna change their thinking, that's gonna improve their bottom line, that's gonna help them run their business better, that's gonna relieve some stress. Because something I learned at a at a work, I paid like $3,000 to go to this weekend workshop one time, and I got absolutely nothing out of it except this one thing. Guy got up there and he said, Listen, it's really hard to sell a $10,000 item to somebody that you've never done business before. It's a lot easier to sell a $10,000 item to somebody that's bought something even if it's for a dollar, because subconsciously that person has already said they trust you, even if it's a little. Now, obviously, you're very unlikely to go from a dollar to $10,000, but that's what the sales funnel is. You say, okay, you're a prospect, now you're a paying client. Now I want to take you to the next level. The next level is you buy one of my courses for 20 bucks. Next level is hey, I have a subscrip a monthly subscription. You can get all of my courses for uh 30 bucks a month. All of my things. Next next level is hey, I'm I'm doing some uh coaching. Okay, I'm doing some group coaching. It's only a hundred bucks a month. Every month we we get together a bunch of small business owners and we do like a mastermind. Okay, you gotta have that pipeline, you gotta know what it's worth. How many people are in that funnel at the end of the day? Because you'll know, hey, for every thousand prospects I get, a hundred will will buy my ten dollar item. Out of that hundred, twenty will buy a course. Out of that twenty, five will sign up for the mastermind. Out of that five, I got a tax client. A tax client is worth, let's say, four to five thousand dollars a year. So I know exactly what that pipeline value is. Client concentration. Now I learned this the hard way. I spent a lot of decades getting the big fish, getting the client at $3 million that was struggling because they didn't have a good accounting system. I would go in there, it'd be the hero, I was the became the CFO, get them to 10 million, and all of a sudden they become geniuses, asking me to do stuff that I didn't feel comfortable doing. And and lo and behold, now they're a big client taking up a big percentage of my time, and we park company. Happened to me six times in my career until I actually put my life on a set of post-its and I put them up on a on the wall, and I looked at it and I said, Oh my god, I keep doing the same thing over and over again. Then somebody told me that this quote they said, the definition of insanity is doing the same thing, expecting a different result. Okay, so how did what does that have to do with the concentration of clients? I decided that's when I decided to do bedrock. I said, I'm done with the big clients, I'd rather have a thousand small clients because it doesn't hurt when a small client leaves you. And there's a lot more of them. And we always have new clients coming in. It's not like that when you have a big client. It's one of the reasons why it's very difficult to grow an accounting practice. It takes years, it takes decades, capacity and utilization. Now, this has a lot to do with your time as a self-employed professional. Are you overworked? If the answer is no, you're probably lying. Or let me put it to you this way: are you sitting around ever with like you don't know what to do next? Like you're sitting around, let's say you own a body shop and you're sitting around waiting for a customer to come in. Well, that's not good. That's not good. That's called underutilization. There's always something that you can be doing, either managing your business, going out there, getting leads, anything. But there's never nothing to do. Now, over the years, and and believe me, it took me years of trial and error, and and everything changed once once I hired my coach, Larry Broughton, because what he did was he taught me how to become a leader and how to develop a team. So now I spend most of my time running my business, managing my team, finding out if they need anything, reaching out to clients. I honestly feel like I don't even work anymore. Yeah, I still have to do some stressful things. I got to resolve, you know, situations with clients. I get new clients with complicated tax problems. But most of the time, I love what I'm doing, like what I'm doing right now. This is part of my business. This is an integral part of my business. I love doing this. It's educating, I don't get paid for this, but it's doing what I was meant to do. I was meant to be a teacher. That's why I became an accountant. If you know my story, my father tricked me into becoming an accountant. I resented him for a long time until I realized that I have the knowledge and experience to help a lot of people. So let's talk about the uh the KPI dashboard and what you you need. What then this is just a suggestion. You need your weekly revenue, you need your lead flow. How many leads do you have? Where are they in the pipeline? What's your pipeline worth? What's your conversion rate? Are you it's not enough. One time we had we did a we planned on doing a workshop on how to create courses using AI. We did some Facebook ads. It the response was through the roof. We had over 2,000 people register. The day comes of the event, we turn on the we put the switch on, we're waiting for all the people to come into the room, and there were crickets. Two people actually showed up, they saw nobody was there, and they left. What we found out was that Google had been blocking our email. So people were registering, and then they never heard from us again. Why? Because we were using words in our emails that that Google flagged. Monetization, I think that that was the word, and we found out the hard way. Two 2000 leads resulted in zero, zero convergence. So we had to go back and figure out why. So we don't use monetization or anything about money or guarantees in our emails. Uh cash reserve. You want to reduce your stress, have cash reserves. Uh pipeline values shows what opportunities are out there. Your client concentration identifies risk. Okay, capacity. Capacity shows limits. If you're at your capacity, it might be time to hire somebody. It might be time to delegate. Okay, all of this information is important. Many business problems appear suddenly, but develop gradually. Dashboards, this information helps you identify these issues before they become a problem. Think about the weatherman. I remember my grandmother every night would listen to the weatherman. Why? Because she wanted to know if it was going to rain the next day, what she had to wear, all the things that you would prepare for if there was going to be rain, or if there was going to be snow, or if there was going to be a lot of it. Okay. Think of this as being a weatherman. Okay. You want to see into the future what's going to happen based on the numbers I have at my disposal today. That's my story, folks. I hope you enjoyed it as much as I enjoyed giving it to you. Follow the podcast, like it, give us a review. It helps. Download the the episode, download all the other episodes. It helps our analytics. And like I said, that's my story. I'm sticking with it. God bless. And we will see you again next week. Over and out. Thank you.