If you want to sell financial products, make some graphs, probably purple or something edgy, and label it “analytics”.

Maybe throw an AI at the end of it too.

But if you want to run a business better, it’s far simpler and much less sexy.

Actually. Scratch that. It’s very sexy. But sexy in the way that we find woodworking, driving stick shift, and running sexy. It’s simple, and honest, and direct. Not a lot of complexity but it’s effective.

There are three improvements I’d make to a company’s financials that I can guarantee would have an immediate and long term impact on the business just from changing how the owners looked at their numbers.

They’re easy to implements. They’re simple to use. And they absolutely get results.

And if you want, you can make some purple bar charts for it to.

Let’s get into it.

Here’s a scenario. You look at your financials in early March to see how February went and this is what you see.

You have two potential reactions:

“Oh sh*t, this is bad this is bad this is bad”

“….huh… that’s not right”

Next month:

You have two potential reactions:

“I’m a f*cking genius! Problem solved.”

“….huh… that’s not right either.”

Both of these are terrible responses. In the first, you believe the numbers which are technically accurate but wildly unrepresentative of the business. The second dismisses it altogether.

I’m not sure what is worse - getting the altogether wrong picture, or ignoring the whole thing because it doesn’t mean anything. In either situation you’re not making decisions on a good understanding of where the business is.

Truth is you did not lose $80k in February. You did a lot of profitable work for a client. You also did not make $111k in March. You just got paid for that profitable work. But that’s how cash basis works.

Revenue is recorded when cash is received. Expenses are recorded when cash is spent.

This is what those months really looked like when we match the revenue and the work, regardless of when funds moved.

Here’s how it looks graphed out. The red line is cash basis profitability (and the inverse of your blood pressure) and the black line is accrual.

Imagine trying to hire based on the red line. You see where March is right now. Tell me where you think April 2026 will be? Any guesses? No?

How confident do you feel adding a new hire to that business?

Think you could guess where the black line will be in April? Of course you do.

And I bet you’d feel more confident making that hire/don’t hire call, too.

Look.

Cash was fine when you were freelancing or just starting out and you really didn’t need financials for anything. All they would’ve said was, “go get more customers”, and you were already doing that.

But now there is a lot going on and it’s time to check the scoreboard. You need that scoreboard to make sense. You need to know where you stand. And you need to have some confidence you know where next month will land also.

It’s time to move to accrual.

Is it more work? Sure.

The right way often is.

Numbers by themselves mean very little. Is $100,000 a lot, a little, good, bad, better, worse, unreasonable, a bargain? Without any context, we don’t know. We all get that. I’m not dropping any big gems here.

And yet.

A lot of businesses still look at their financials like a grocery list and complaining about the cost of blueberries.

No context other than what they think something “should” cost.

Bootstrapped founders tend to be extra cost conscious - every dollar spent comes out of their pocket in the end. Often that means spending is made from a more emotional perspective.

In the absence of proper context, we apply PERSONAL context, and while that’s real, it’s limiting. Everything FEELS expensive. We hold too tightly to our capital. We’re stuck thinking small.

We have to put these numbers into proper context and think objectively about the business.

First up, compare to similar periods.

Look at:
Last month
Last year
Rolling 3, 6, or 12 month
Budget

I like these four so that I can see:

Context.

This is my favorite one. I run more of my business off this framework than anything else. I’ve led turnaround using only this. If you take one thing from this, or maybe even all my newsletters, this is the one.

Put everything as a percent of revenue.

This is the ultimate context that matters.

Even if I know something is double what it was last month or last year or even a rolling average of the last 6 months… that still doesn’t tell me if it SHOULD have been double.

If an expense is double what it was, the first reaction is “BAD!”

If we add the fact that revenue was up 3x… suddenly that’s looking much better.

As a percent of revenue, it got cheaper.

Your business is a machine that does three things.

That’s it.

For ever dollar you collect, part of it needs to go to getting another customer, part of it to doing the thing, and part of for stuff like software and insurance and stuff. And then you need something left over.

You should know, better than any other number in your business, how much as a percent you spend to do each of those things and how is left over.

You should know both how much each percent SHOULD be.

And how much it ACTUALLY is.

And you should manage accordingly.

I price in order to keep COGS as a certain % of revenue.

I set my marketing budget as a % of revenue.

And I add to my overhead - office space, support staff, etc. - based on my budget… as a % of revenue.

Look at these numbers every month.

Pin them to your wall. Write them in your journal every day. Make it into an anthem you sing every day. Type them into a computer like LOST every 108 minutes.

I wouldn’t be mad if you tattooed “% of revenue” on your body. It’s THAT. IMPORTANT.

Know. These. Numbers.

This should be your north star guiding you.

Of course it’s not. Getting those numbers to do what you want is hard.

Tracking them is going to be the easy part.

But the funny thing about tracking things, is that you’ll notice you start leaning towards them. Subtle actions done with this information on the brain tends to add up. It just tends to improve when you’re paying attention.

So get financials that make sense, even if these are the only 3 things you changel.

It’ll make a difference.

Do those three simple things and I promise your business improves.

A Good Operator Life
A Substack Journal dedicated to the lifestyle behind the Lifestyle Business

Follow Chase on LinkedIn
Antagonistic posts, unnecessary rants, and the occasional gem of insight

Follow Chase on Instagram
A visual journal documenting the life of a cash flow operator

Work with Good Operator
We obsess over financials, systems, workflows, and cash all day everyday - let us obsess over yours.