“Know Your Numbers” What Does That Actually Mean?

If you’ve been in business for more than five minutes, you’ve probably heard someone say, “You need to know your numbers.”

It sounds good. But let’s be real, that’s really vague and well, what does that actually mean? And why is it so important?

“Knowing your numbers” isn’t about turning into an accountant or spending hours nerding out in spreadsheets. In business cashflow is king and the life blood of your business so its vital for you as a business owner, to have a clear picture of the financial health of your business. 

Knowing your numbers is important, so you can make smart decisions, avoid nasty surprises, and grow with confidence.

So what are these numbers that you need  to know? 

1. Profit (Are You Actually Making Money?)

Too many business owners confuse turnover/revenue/sales with profit. Just because money is flowing through your account doesn’t mean it’s sticking.

👉 Profit is what’s left after all expenses are paid – your cost of goods, operating expenses, loans, tax…  everything.

If you don’t know your profit margins, you don’t know if your pricing is right, if your costs are blowing out, or if you’re slowly bleeding cash while staying “busy.”

2. Cashflow (Is Money Coming In?)

Cashflow is about timing. You might be “profitable on paper” but still strapped for cash because clients are slow to pay or bills hit at the wrong time.

👉 Knowing your cashflow means understanding what’s coming in, what’s going out, and when.

Cashflow is the difference between sleeping well at night or lying awake wondering how you’re going to cover wages on Friday.

3. Break-Even Point (What’s the Min. to Cover Costs)

Your break-even point is the magic number where your sales cover all your costs. Anything above that is profit. Anything below? You’re going backwards.

👉 If you don’t know this number, you’re essentially guessing whether the work you’re doing is making you money or not.

4. Job/Service Profitability (Are Your Jobs Worth It?)

Not all clients or projects are created equal. Some are cash cows. Others are time-sucking black holes.

👉 Knowing your numbers means digging into which jobs, services, or clients are actually profitable and which ones you need to stop prioritising/taking on.

If you’ve ever wondered, “Why are we flat out but still broke?” This is usually the culprit.

5.Cash Gap (Who Owes Who?)

Healthy businesses stay on top of money owed (debtors) and money due (creditors). If you’re not tracking this, you’re setting yourself up for stress.

👉 Knowing your debtor days (how long it takes clients to pay) and creditor commitments means no more nasty surprises.

Why It Matters

Here’s the truth: business owners who don’t know their numbers make decisions based on gut feel, bank balance, or panic and that’s risky business.

When you know your numbers, you gain:

• Clarity: No more guessing.
• Control: You make decisions with confidence.
• Confidence: You stop feeling like you’re flying blind.

And the best part? It’s not as hard as you think. With the right systems, weekly check-ins, and some accountability, you don’t need to be a financial whiz, you just need to be engaged.

If you don’t know your numbers or you don’t even know where to start, you’re not alone. Most business owners were never taught this stuff. That’s where I come in.

At Change State, we’ve got the tools to help you know your numbers with confidence. The best part? You don’t have to figure it out on your own.