Do You Know Your Numbers?
About this episode
Revenue gets the bragging rights, but it doesn’t tell you whether your business is healthy. A $5 million company making $50,000 in net profit is working a lot harder than it needs to.
In this episode, Kerry goes back to basics with three reasons knowing your numbers is critical for home service businesses: better cash flow management, higher profitability, and smarter, informed financial decisions about hiring, crews and equipment.
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Key takeaways from this episode
- Multiple bank accounts show at a glance whether rent and payroll are covered.
- A cash flow forecast shows your bank balance after upcoming payments.
- Net profit matters more than revenue: aim for double digits.
- Review your pricing at least quarterly, and watch vendor bills for price increases.
- Accurate numbers let you plan for crews, hires and equipment instead of guessing.
Show notes
Back to basics
After a run of case studies and Profit First episodes, Kerry returns to the core message of the show: why knowing your numbers is critical to your success.
Reason 1: Cash flow management
Slow-paying customers, staged project payments and seasonal swings all strain cash flow. Multiple bank accounts show at a glance whether rent and payroll are covered, and a cash flow forecasting spreadsheet shows what your balance will be after upcoming payments.
Reason 2: Boosting profitability
Kerry would rather run a $3 million business making $300,000 in net profit than a $5 million one making $50,000. Look at job cost reports, efficiency and material costs, and review your pricing every quarter so rising supplier and subcontractor rates don’t eat your margins.
Reason 3: Smarter decisions
Accurate numbers help you make informed decisions about hiring the right people, adding a crew, or saving ahead for equipment like a replacement trailer, and give you peace of mind. That starts with experienced bookkeeping and clear processes, not handing QuickBooks to a cousin.
Check your numbers this week
Do your numbers make sense, and do you trust them? Kerry invites listeners to book a 15-minute call for a quick look at their QuickBooks.