If you want to understand and run a profitable business, you must start with your costs and expenses rather than your revenue. Many business owners focus on sales first, but that approach often sets them up for frustration and financial pressure. What matters most is understanding what it truly takes to operate your business and deliver your product or service.
If your expenses are higher than your income, the business will always operate at a loss regardless of how strong your sales appear. This is often what leads business owners to rely on loans or outside capital to stay afloat. It is also why so many businesses fail within the first five years.
The STOP Method™ is a game-changing budgeting method I created, which includes the 9 most important financial KPIs to focus on. This blog begins a series for the month of April where each KPI will be broken down and applied so you can begin leading your business with clarity instead of guesswork.
What is a KPI?
A KPI, or Key Performance Indicator, is a measurable number that reflects how your business is performing. It provides insight into whether your business is on track and supports more informed decision-making. It is used to create alignment and clear goals for both the business and the team.
KPIs help you:
- Measure progress over time
- Make informed and timely decisions
- Lead your business using data rather than emotion
The 9 KPIs I focus on in The STOP Method™:
- COGS & Expenses
- Broke even
- Profit
- Income
- Revenue Generators
- % of income goal for each Revenue Generator
- Average price point for each Revenue Generator
- Dollar amount goal for each Revenue Generator
- Number of clients needed to achieve income goal for each Revenue Generator
Final Thoughts From Your Favorite Accountant
KPIs can feel overwhelming. For most business owners, this is not something you were ever taught. You were taught how to do your craft, how to serve your clients, and how to work hard. You were not taught how to read your numbers, interpret them, and use them to lead your business. So if you are reading this and feeling unsure, confused, or even a little intimidated, that is completely normal. This is not something you are supposed to already know. This is something you learn.
That is exactly why I created this series. Over the next 9 blogs throughout the month of April, we are going to walk through each KPI together. One at a time. Simply, clearly, and in a way that actually applies to your business.
You do not have to figure this out all at once. You just have to be willing to learn and be curious about your finances vs think they are a bore or that you are not good at them.
If you are ready to stop guessing and start understanding your finances, here is how I can support you:
📊 Bookkeeping Services
💼 Self Guided Financial Masterclasses
📘 Buy my Budgeting Book
Because at the end of the day, cash flow isn’t luck, it’s strategy.
