Why It’s So Important for Online Business Owners to Understand Their Finances

“I’m not a numbers person.”

I hear it all the time from our bookkeeping clients and the people I chat with. I’m a bookkeeper for brand and web designers, as well as a number of other creative online entrepreneurs, and I KNOW so many of you think that numbers are totally out of your wheelhouse.

But the truth is… you don’t have to be a numbers person to run a successful, financially stable business. You don’t even have to like bookkeeping or spreadsheets. You just have to know a few basic things about your business finances so you can continue to grow — and pay yourself what you really deserve to make.

So let’s dive in and talk about WHY you should lean into your online business finances if you want to build a stronger business. 

Do you avoid looking at your online business finances?

Ok, first I want to address why so many creatives and online business owners HIDE from their finances. 

For one, most of us don’t grow up with entrepreneurs in our households. We haven’t had this sort of business lifestyle modeled for us. And if we did, we might have some personal experiences with the stress that comes along with making enough money to support your lifestyle or family. That’s true for parents with regular jobs, as well, though.

Our money stories will ALWAYS impact how we view our finances, whether we work a 9 to 5 or we have our business. So I always encourage people to think about how they THINK about money.

Consider your money stories

If you find that you’re constantly stressed out about money or that your bookkeeping just really seems to get away from you, I also want you to know… It’s not you.

You’re not the problem. You’re not “BAD” at money. Usually, what this tells me is that you need better systems or tools to support the way you work in your business — and maybe even the way you process numbers.

Find tools that work for YOU

For a lot of my clients, seeing a TON of numbers in a spreadsheet is super overwhelming. They don’t like it. So instead, we recommend that they use a simple bookkeeping tool like Xero. 

You can easily categorize income and expenses in just a few minutes, and then you see everything in a super clean dashboard that tells you how much money you have or which invoices are outstanding.

Easy, right?

But that’s just one side of the coin. I know that many of you probably already have a bookkeeping process — and if you don’t, you can find out if you “just” need a spreadsheet or if it’s time to hire a bookkeeper.

Even if you have a system or a process that works, you might just avoid your numbers because… well… they’re numbers. If you’re in the black or have cash on hand, you might think that’s all you need to know.

But your business numbers are more than just revenue. 

Look at your business finances as more than revenue

Looking at your business finances, and having a clear bookkeeping process, can actually help your business thrive — and can make it easier to give yourself a raise, build a team, or invest in that exciting new program you just found.

When you know your business finances, you can:

See revenue and profit by offer

You might have an offer that’s a total cash cow for you, but you are not making profit on it after you pay your team or other expenses. On the other hand, you might have an offer that’s making great profit but you’re not really focused on it. 

Knowing this can change the way you market your offers!

Make changes to your business based on numbers — not feelings

It’s so easy to get overwhelmed by all the choices we can make in our business, right? One bad client means we should just stop offering our signature service. One refund request means our products should be shelved. 

But with your numbers, you can really see: Is this making me money? Is this costing me money? And if it’s not worth the money for the time or energy you put into it, you can make a decision much faster because you know exactly what is happening to your bottom line.

See returns on investments

Are you running Facebook ads but don’t know if they’re actually paying off? Did you launch a new offer but aren’t sure your investment in social media strategy worked? Did you hire a new team member but aren’t sure how it’s benefiting your overall profit or production? 

Knowing your numbers can make it VERY easy to see what’s working and which investments are getting you a return. And like I said before, it makes it easy to part ways with something when you can see it’s not paying off.

Understand sudden changes in revenue

Have you ever had a sudden influx of bookings or purchases and wondered… where in the world did that come from?? 

When you see those sudden jumps in revenue or transactions with regular bookkeeping, you can actually go back through your content marketing, podcast appearances, or even Instagram tags to see how those people found you and what content really convinced them to work with you. 

Avoid a stressful tax bill

Let me know in the comments if you’ve ever had the wind knocked out of you after calculating your quarterly estimated tax payment. 

You’re definitely not alone. We’ve had so many clients come to us for bookkeeping needs after they realize they didn’t save enough for taxes — or even know how to set aside money for taxes.

But when you know your finances and regularly check in with them, you know what you need to save. Plus, with a bookkeeping process, you can automatically move money over to your tax savings account. (Yes, you should have different accounts for different needs — find out how many here!) 

Pay yourself every month (+ take more home)

Knowing how much you can pay yourself is huge for most business owners. You started your business to help people or to fill a need in your industry, but you also want to make money. 

That’s why understanding your business finances is so important. Between the income you make, your expenses, and your tax savings, you need to know how much is left over to pay yourself — and you want to make sure that number is consistent enough to support your lifestyle! 

But if you don’t focus on your finances and really lean into looking at your numbers, you might be struggling to pay yourself enough and your business won’t be able to sustain itself because YOU can’t sustain it. 

We don’t want that. So get to know your numbers. Get comfortable with looking at them. And try not to assign your worth to the numbers you see. You are not the numbers in your bank account or on a spreadsheet.

Your value is not based on your bank account!

I know that it can be hard to look at your numbers and wish you were further along or that you hadn’t spent money on that “bad” investment. But those numbers aren’t a reflection of you or your value! You’re so much more than that, my friend. 

If you want more business finance tips, bookkeeping tutorials, and no-shame advice on how to run your creative online business, make sure you follow me on YouTube, where I’m getting real about online businesses and money.