Financials

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The Financial Reports Your Business Needs

January 12, 2023

7 minread

byAutumn Joyce

Autumn Joyce
Autumn Joyce

CEO, Co-Founder

Chicago, IL

Autumn knows first-hand the hard work, commitment, and determination it takes to build and grow a business. As a top-producing business advisor, she helps her clients identify obstacles by developing smart and actionable business strategies, preparing for challenges, and helping them avoid the pitfalls small business owners face in growth. She specializes in entrepreneurial mentorship, talent recruitment, consumer behavior, and systems development.

Do you find managing your business finances to be a pain?

Most entrepreneurs don’t go into business because they are passionate about financials, but however tedious it may seem, keeping your finances in order is extremely important.

At any stage of your business, whether you’re just starting or you’re a seasoned entrepreneur, there is a direct correlation between having a firm grasp on your financials and running a profitable business.

It is the only way to project where your business is headed, and when you know exactly how your revenue and expenses are stacking up you can make more informed decisions for your business. You can always greatly benefit from financial advising.

If you’re ready to get your financials in order, there are these three reports you can use to analyze your financials strategically and grow your business. I will start by saying I am not an accountant, so when in doubt, do what your accountant says. However, these are the basic financials I need as a Business Advisor with any client in any industry to start discussing scaling their business profitably.

Annual Budget: This is not your financial breakdown of the previous year. This is a financial forecast for the coming 12 months. List out your categories and forecasted budget for the year in the following areas.

  1. Revenue – break out each revenue stream and identify your total revenue target for the year in each area.
  2. Variable costs – these are the costs that increase in direct proportion to your sales increasing. For example, the more tea a coffee shop sells, the more tea bags they need to buy. The variable cost would be the tea bags.
  3. Fixed expenses – those costs not linked to revenue; think of them as sunk costs that you will spend regardless of your sales. For example, the cost of buying a delivery vehicle will be paid whether you sell a lot or a small amount of food in your food delivery business.
  4. Assets – If you paid $6000 for that vehicle and you could resell it at the end of the year for $5000, this would be listed out as well. This asset has profit sitting in it. Only assets purchased in that year will be included here.
  5. Profit – total up these areas and see your profit number. If you don’t like it, start problem-solving! Sure is better to know there is a problem now than be surprised at the end of the year. With knowledge of a problem, you have the opportunity to change the outcome.

If you are in doubt on what to forecast, ask the following questions:

  • What was this number last year for me?
  • Was that number enough? Or does it have to increase/decrease this year to hit my goal?
  • What is this number typically in my industry?
  • What do I need this number to be to ensure I hit my goals?

The answer to the accurate forecast is at the crossroads of the answers to these questions. Choose a number and go with it; you will learn whether you are right or not quicker than if you sat on the fence.

Monthly Cash Flow: Break your annual budget into a month-by-month view so that you know what your net will be each month. Sometimes a couple of negatives months come right before the big payout. You can save yourself a ton of stress by just knowing that it will happen and how long it will last.

Expense Tracking: Budgets are only useful if you follow them. Whether you have an online program like Xero or Quickbooks or a simple excel sheet, you must track how much money you spend and consistently compare it to the budget.

Put these three reports together, and you will know your financial reality so that you have the chance pre-emptively to influence the result. After all that work, you still aren’t done. It’s not about DOING your financials; it’s about ANALYZING them for more information. Look at your numbers for an hour and see what you learn about how you can improve your business.

Having a better understanding of your accounting can go a long way to better manage and monitor your business’s health. If numbers aren’t your thing, and you don’t know where to start, you don’t have to go at it alone. Schedule a free two-hour session to dig into your business and develop a plan.


Nicole Gallop is a VP at Cultivate. As a strategic planner, Nicole is unafraid to push boundaries to achieve goals. Her passion is optimizing the potential for both you and your business. She operates with an intense focus on bringing the right people into a highly collaborative, positive, and result-oriented environment.

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