Know Your Numbers or Lose Your Business!
Know Your Numbers – Or Your Business Will Bite You
Running a business isn’t just about working hard or chasing sales. If you don’t know your numbers, you’re basically playing golf without keeping score feels fun until you realise you’ve lost track of where you are.
On this round of About the Green, I teed it up with Pete Prema from Onboard Financial to break down the financial basics every business owner should actually understand. Pete’s an accountant (and a decent golfer when he stays out of the trees), and he had some seriously good advice.
Why Numbers Actually Matter
A lot of business owners I talk to are legends at what they do builders, hospo owners, tradies but when it comes to the numbers, they either hand it all to their partner or hope the accountant sorts it once a year.
The problem? If you don’t know what’s happening with your costs and margins week to week, you can’t react fast enough when things change. Materials go up, labour costs rise, sales dip if you’re not across the numbers, you’ll run out of cash faster than a slice out of bounds.
Pete reckons your numbers should be like a GPS. Without it, you’re flying blind.
The Key Stuff You Should Check Weekly
Pete kept it simple track these and you’ll already be miles ahead:
Cashflow – what’s actually in the bank.
Margins – are you charging enough after costs?
Budget vs actuals – are you on track, or do you need to tweak things?
The cool thing? Over time, Pete says his clients start telling him how their business is performing, not the other way around. That’s when you know you’re getting it.
Telling a Better Story With Your Financials
This one hit home. Most business owners mess up not because they don’t care, but because they record things wrong.
Example: a builder spends $10k at Bunnings because they’ve got two jobs lined up. They invoice $5k worth of work in April… but record all $10k as April expenses. Suddenly the books show a negative profit and they’re stressing.
Reality? They should’ve coded most of it as stock, then only moved $2k (the cost of the April job) into expenses. Boom, profit margin looks right, and now you can actually trust what your P&L is saying.
Or in Pete’s words: “If rubbish goes in, rubbish comes out.”
Don’t Sleep on Your Break-Even Point
If you’re starting out, this is a big one: know exactly how many sales you need to cover costs.
Set up a simple budget, play around with margins and fixed costs, and work out where profit hits zero. That’s your break-even. Once you know it, you’ll see how even a 1–2% margin shift can make or break your year.
Plus, planning for the quiet months (like January in NZ) means you’re not blindsided when cashflow dips.
The Biggest Mistakes Pete Sees
Not wanting to know the numbers (burying your head in the sand).
Only catching up with your accountant once a year.
Coding stuff wrong so your reports don’t make sense.
Not working out break-even before it’s too late.
Takeaways From the Round
If you want to run your business with confidence (and avoid stress), here’s the cheat sheet:
Know your numbers – don’t leave it all to someone else.
Use your accounting software properly – Xero’s only as good as the info you put in.
Keep an eye on margins – prices rise, make sure you’re not left behind.
Figure out your break-even – non-negotiable.
Work with your accountant early – let them coach you until you can call the shots yourself.