How To Increase Profits by Knowing Your NumbersJun 20, 2021
In this episode of Profits + Prosecco Podcast, I’m going to be talking about what you need to know about the numbers in your business along with a discussion on my profit and loss workbook. You can continuously increase your profit when you're aware of your numbers and in control of all areas of your business. So if you want to start expanding your profit, stay tuned for much more details!
But before we dive right in, welcome to the Profits + Prosecco Podcast! I’m your host, Katie Ferro, CPA, reformed rule follower, creator of Booked Out Bookkeeper, mom to 3 little ones, and Kajabi enthusiast.
This podcast is for entrepreneurs who desire to change their life through their profitable business, and for bookkeepers and accountants who want to escape the 9-5 and start a simple scalable bookkeeping business like I did.
Bookkeeping increases profits and profits change lives. So pop some bubbles and let me show you how!
In this episode, you'll learn everything you need to know about making a bigger profit through one simple step, which is knowing your numbers. For even more juicy details, listen to ALL of episode 29 of the Profits + Prosecco Podcast on your fave streaming platform.
What I usually see in the entrepreneur space.
So many entrepreneurs and business owners are good at what they do. They know how to sell great products, courses, and services BUT they're typically not good at keeping track of their profits.
They are heavily into sales but unaware of what they're actually making at the end of the day.
If this is the one area of your business where you feel like you're failing, know that you are definitely not alone. Once you solve this problem in your business, you're going to be limitless.
Sales vs. Profit
Honestly, the calculation is extremely simple.
Your profit is what's left after your costs. I see so many business owners claim these six-figure businesses, but as a bookkeeper, I see what they are actually taking home.
The goal here is to not pay attention to sales. We want to pay attention to profit because at the end of the day, that's what matters and that's what provides for you. Profit is key because success can often feel like your one client away.
If your business is not profitable, every time that you make a sale, you pay for it and you don't have anything left.
Reaching in your pocket to pay for the luxury of sales is NOT what you want to be doing. How do you calculate profit? Easy…
Sales - costs = profit
Therefore, if you know your sales and you know your costs, you are well aware of all your numbers. To grow your profit, focus on it because anything you focus on in your business grows!
Treating your business seriously to increase profits.
When you treat your business seriously, you don't go out and get a personal checking account.
If you're going to take one thing away from this post, take this: You NEED to be separating your business and your personal funds.
Your business is not a side hustle. I want you to believe that your business is going to take off and it needs a separate account. If that means paying monthly to have a checking account for your business, then do it because it's worth it and you get to see your numbers right in front of you.
There are certain ways to avoid these fees. For example, I use Bank Of America and I just have to maintain a certain balance to avoid a fee.
Do your books on a monthly basis.
This is what you should be doing to continuously see if you're profitable.
I do my books monthly along with my clients and it's enough where it's not too much. If you're not going to do it yourself, then you should 100% have it done for you.
When you see your books, you're going to be able to know what's happening and increase your profits. Keep in mind, you're not able to do tax planning when you have no clue what you're profiting from.
Just another great reason to get a bookkeeper!
Looking at it monthly is going to allow you to:
- Increase your take-home money.
- Adjust your prices if necessary.
- Lower your expenses.
- Make sure you're not bleeding money.
My small biz starter kit.
In this kit is the profit and loss workbook.
This is a workbook that can essentially replace QuickBooks, which you have to pay a monthly subscription fee for. My kit is a one-time purchase and you'll have it for the rest of your life.
People have been RAVING about it! This kit can overall improve your profits, which will improve your impact, which will improve your life (Not to be dramatic, but it's true!)
To purchase the kit or just get more information, click here!
How To Increase Profits by Knowing Your Numbers: The Bottomline
I hope this episode helps you increase your profits and get aware of your numbers. Remember, there is a difference between your sales and profits and when you know what's going on behind the scenes, you can adjust to your needs and make more money.
If you enjoyed the episode, please take a second to rate and review. Each review helps us reach and inspire more entrepreneurs and bookkeepers just like you.
Don’t forget to take a screenshot, share it in your Instagram stories, and tag me at @orderlyaccountingbykatie. Cheers to your inevitable success and I’ll see you in the next episode!