Published on
Line Item Equilibrium
Written by Michelle Brown
When the gurus and the life coaches talk about balance, I can’t help but roll my eyes. Today’s rapid fire world makes it hard to catch your breath. Every day is a new reality and the rules of engagement are shifting every nano-second. We are a world on high alert.
And yet, slowing down — and I mean way down — you can see your business from a perspective so insightful and so telling that you’ll wonder what took you so long.
If you’ve got an avoidant-attachment to your financials, I’ve gotta tell ya, you’re missing out. When you interact 1:1 with the data, the numbers will start talking. When you slow down and listen — and I mean really listen — you will gain a deep and meaningful understanding of how you got here and where you’re headed.
Where you’re headed, my friend is balance, harmony, and line-by-line equilibrium. Here is how to get there.
Digest, don’t skim.
Put your mind on your money and your money on your mind. This is not the time for multitasking, distractions, or phoning it in. Insights, analysis and decision making—it’s quality in / quality out.
Nothing less than an active engagement with your numbers will do; you must get your hands deep into the data. It’s one thing to skim a report; it’s a whole ‘nother thing to painstakingly add up everything you’ve earned and everything you’ve spent.
Then, and only then, will the numbers start talking to you. Then, and only then, can you stop reacting to business as it comes at you and start creating the business you want.
Get up close and personal with every financial channel going in and out of your business. What does your money touch? Business checking and savings, VENMO, PayPal; credit card processors and online payment portals; credit cards and lines of credit; paper receipts and Amazon purchases; petty Cash and owner contributions; barter? If even a penny is exchanged in the name of business, it’s time for some quality time.
Learning to read books.
While accounting refers to the practice of recording a business’s financial transactions, I want you to do more than record; I want you to read. What do the numbers say?
Where does your revenue come from…and from whom, exactly? Perhaps that piddly client you’ve been paying less attention to is really adding up to more revenue than the big client you’re obsessed with. Over time, their lower ticket retainer has actually outperformed the higher maintenance client. Now that you know who is really investing in you and your business, you can plan accordingly. What would a little extra customer love mean to that client and how would it keep them from wandering elsewhere? Sometimes we get distracted by the Goliaths of the world, when it was the Davids who were building us up the whole time.
Where does the profit go….and to whom, exactly? I recently had a client discover that she had been paying for Netflix and Hulu, religiously, every month. Twice. She had direct subscriptions AND she was paying for them through Apple TV, a device that lived at her ex’s house. Ouuph. It was only by getting her hands into the data that she could see the forest for the trees, cancel that senseless streaming, and make a plan for her life. Instead of continuing to painstakingly navigate chaos and confusion about the who-what-why-and-how of her financial situation, she read the books.
For every transaction there is an opposite transaction. When you learn to read the books— something that will naturally happen as a result of interacting with it and identifying patterns—your newfound literacy will lead you to fully grasp the concept that for every transaction, there is an opposite transaction. And when you understand this, you will develop an eagle eye for expenses that might have otherwise gone unnoticed, charges that are unauthorized-slash-erroneous, and/or leaks in the system that result in less profit and more tax burden. If you’ve got income coming in via a payment processor, there is a processing fee that comes along with that. If you’ve given a refund, there’s a cost to that transaction. If you’ve paid for something out of pocket, there’s a reimbursement for that. If your sales are down, your marketing should be up.
In-Search-Of Line Item Equilibrium
Now that you know how to read your books and interpret what the numbers are telling you, dogged decision making just got a whole lot easier.
Once you understand that “Balance” isn’t just today’s pop psychology here to set us up with an impossible-to-attain ideal, it’s the lens by which you can understand the past, present and future of your business, now you can really put the pedal to the metal on your goal-getting.
By prioritizing line item equilibrium—seeking the truth, the whole truth, and nothing but the truth, so help you dog—and embracing this level of financial literacy, you can get crystal clarity on your past and present to uplevel your future. Because you, and your business, are worth it.
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Need help understanding what the numbers are telling you? Reach out; we’re teaching people how to uplevel their understanding like Snoopy the Flying Ace learned to fly, who inspires us all to go big or go home. Snoopy knew that you must have a big dream if you are going to lead a big life—and we couldn’t agree more.
Unleashed Financial Advocates is making money moves with canine-inspired confidence.