The Numbers You Think Matter (And the Ones That Actually Do)
For years I watched the wrong number.
Revenue.
That was the one I cared about back when I was running my photography business. The one I told people when they asked how things were going. The one that made me feel like things were working.
And things looked like they were working. Before I started JEA, I built a photography business that was doing multiple seven figures!
But, I was paying myself only $25,000 a year.
I tell that story a lot because it's the cleanest example I have of what happens when you watch the wrong numbers. Revenue was up. My business looked successful. But I was quietly broke.
I had a finance degree. I'd worked at Dow Jones. And I still got it wrong, because nobody had ever told me which numbers actually mattered. That experience is a big part of why I do what I do now, helping other business owners avoid the version of success that leaves you underpaid and exhausted.
Most business owners are watching three numbers, and all three of them lie.
Revenue. It can feel like a scoreboard. The number you celebrate, the number you put in your year-end recap. But revenue tells you almost nothing about whether your business is actually working. You can grow revenue and lose money. You can grow revenue and pay yourself less. I did both for years.
Bank Balance. This can feel concrete. You log in, you see the number, you know what's there. But that number is a snapshot, not a story. It doesn't tell you what's about to leave the account, or whether next month is going to feel like this month.
The Profit line on your P&L. This is the most frustrating, because it looks official. Your bookkeeper sends it over, you read the number at the bottom, you think you're being responsible. But for most owners, that number is misleading. Owner pay is buried in the wrong place. Distributions don't show up at all. The business looks profitable on paper while you're personally underpaid and stretched thin.
So what are the right numbers?
The first one I look at with every client is:
Owners Pay - As a percentage of revenue. Not the dollar amount, the percentage. The dollar number makes you feel something, usually bad. The percentage tells you whether the business is structured to pay you. One is the symptom. The other is the diagnosis.
Real Operating Margin. Real meaning after owner pay is taken out as a true expense. Most P&Ls don't show you this, they bury owner pay in a way that makes the business look more profitable than it is. Pull owner pay out, treat it like the salary it should be, and what's left is the truth. That's what's actually available to reinvest, to weather a slow month, to grow.
The trend on each of your Profit First accounts. Not the snapshot, the trend. Is the profit account growing month over month or staying flat? Is the tax account keeping up with what you'll owe? Is operating expenses creeping up quietly, the way it does when you stop paying attention? The snapshot tells you where you are. The trend tells you where you're going.
That's it. Those are the numbers I want my clients watching every week.
If you're watching revenue and your bank balance and calling it a day, you're not running your business. You're reacting to it. And reacting is exhausting, because the numbers you're watching aren't the ones that predict what's coming.
If you don't know which numbers you should be watching, that's worth a conversation. Book a Financial Clarity Call and we'll look at your actual numbers together. I'll tell you which ones are lying to you and which ones to trust.
You've been working too hard to keep guessing.
