How to Understand Your Business Without the Overwhelm

If you have ever avoided looking at your business numbers because it felt easier not to know, this episode is for you. Karas Wright breaks down why so many good business owners struggle with cash flow, financial clarity, and decision-making, even when revenue looks strong on paper.

In this solo episode, Karas shares practical, real-world insight from her background in banking and leadership, along with simple tools that help business owners stop reacting from stress and start making confident financial decisions. From understanding your baseline to building a

90-day financial view, this conversation is all about creating structure that supports growth.

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WHAT YOU'LL LEARN

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→ Why not knowing your numbers can quietly damage your business

→ The myth that more revenue automatically fixes cash flow problems

→ What your business baseline actually is and why it matters

→ How to create a simple decision filter before spending money

→ Why a 90-day financial view can reduce anxiety fast

→ How poor cash flow management affects hiring, growth, and operations

→ The identity shift that happens when you lead from financial clarity

00:00 Why your business numbers matter

01:37 The tax-time panic many owners face 

03:57 The myth that more revenue fixes cash flow 

05:06 Know your baseline number

10:27 Use a decision filter before spending

16:52 A real hiring example from a client

20:01 Why financial anxiety feels bigger than it is 

21:06 Build a simple 90-day view

23:39 The identity shift of a confident business owner 

24:27 How the Wright Step Ecosystem supports growth

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ABOUT KARAS WRIGHT

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Karas Wright is a Business & Leadership Coach and the creator of The Wright Step Ecosystem. With a background in banking, financial planning, business leadership, and coaching, she helps business owners move from scattered to structured so they can lead with more clarity and confidence.

Website: www.wrightstepcoaching.com/

Instagram: @wrightstepcoaching

If this episode gave you a clearer way to think about your business finances, like, comment, and subscribe for more conversations on leadership, strategy, and sustainable growth. Tell us in the comments: what is one financial habit that has helped you feel more confident in your business?

#BusinessCoach #SmallBusinessTips #CashFlowManagement #BusinessNumbers #EntrepreneurMindset #LeadershipDevelopment #FinancialClarity #WomenInBusiness#BusinessGrowth #KarasWright

Transcript

SPEAKER_00 0:00

The identity shift that happens as a result of this is looking at this from a I'm the type of business owner who doesn't have a clue what's happening and I'm scared of my numbers, to I'm the type of business owner that confidently can make decisions in my business because I know the impact that a financial decision is going to make. That is a powerful shift. And it's one that you don't have to make alone. A lot of times business owners feel that they're an island of one. Well, that you're not. There's communities that are built to be able to help navigate through these together. One of the ones that I have done myself is to create the right step ecosystem and the right step, the next right step community, both of which are community-minded groups that allow you to thrive, have conversations, and start to build confidence. The reason for that is I wanted to have a candid conversation with you about something that's really important in business. And that's understanding your financial numbers because they really matter in business more than most of us think they do. And so I want to take you back to a conversation I had with a room full of business owners last week and really talking about the impacts if we don't have our numbers sorted out. Maybe we're hiding behind not recognizing that we need to actually update our QuickBooks on a regular basis. And we're putting our proverbial heads in the sand because not knowing is sometimes easier than knowing. However, that tends to creep up on us. So I want to share a few things with you. First of all, tell you a little bit about my backstory. For those of you who don't know me, I come from a career in banking. I spent many years as a financial planner, a business banker, and a leader in finance before I moved into coaching leaders and supporting their staff. And I want to share a bit of a story that occurs, well, regularly this time of year. In Canada, it's tax time. And my phone tended to ring off the hook. And often it was a conversation of I'm a little scared to take a look at my numbers. I just got a remittance from Revenue Canada. And worst case scenario, my bank account is frozen. And these things happen to really good business owners, really kind, really intentional people who are just running their business. They're not intending to get behind, but because they're just doing what they're doing, which is running their business. But the reality is there is an impact of not stopping and creating the structure to understand what your finances are. And so I want to share a couple of really important stats here. The first one is 60% of Canadian small to medium enterprises report the ongoing cash flow challenges, even when revenue is going strong. And what that is, it's not necessarily an issue with revenue coming in. It's actually a systems issue and a structure issue. And this is exceptionally important. When we are not running our businesses with having structure, it can cause bottlenecks and other aspects of our business. If we don't know our numbers and we don't know where other than what's in our bank account, because honestly, when I was in that room of business owners, I asked them to raise their hand and said, how many of us know what our number our bank account balance is? And almost everybody's hand went up. When I asked them if they knew what the forecast was going forward of their revenue, I had one hand up in a room of 20 people. That is scary, but that's pretty accurate in terms of what the stats are. It doesn't have to be that way, though. You can take control over your finances in your business and understand and do so in a relatively quick manner. So what I shared in this room with these business owners was some three really simple things that you can do in your business. Now, I want to cover off a myth. More revenue is going to fix our cash flow issue. And there actually is an issue with that. When business owners are running high revenue and they actually aren't looking at the other side of their income statement, which is their expenses, they actually can be leaking funds. More money actually through a broken structure can actually cause ripple effects. It can affect what your purchasing power is. The other thing that is really impactful is that once you get that figured out and you get a system in place, it's really simple to keep on top of it. So three things that are going to be really impactful. And it has nothing to do with whether you're intelligent or not or a great business owner. They really are just simple systems to put into place. The first thing I want to talk to you about is what your baseline is. Now, I'm not talking about Megan trainers. It's all about the base. I really am talking about what is the minimum number of income that you need to be bringing in to cover your taxes, all of your expenses. And if you're a solopreneur, this also includes your personal expenses as well as the business expenses. And it is not a budget. Because I know from being a banker for several years, that B-word, budget, is a four-letter word for many people. It really is your baseline, that floor, that bare minimum every month that your business needs to be bringing in. Once you understand what that is, you're going to be able to react and I should say, not react, respond to any fluctuations in that as opposed to what you're doing right now, reacting. It really takes the sting out of things. 82% of business owners fail because they tried poor cash flow management and they didn't really stick to the system that was there. That's 82% of people that are going out of business because they don't have that understanding of what their baseline is. So my ask of you as a business owner is to sit down tonight, not next week, not next month, tonight and figure out what your baseline is. Take a look at any three months worth of your revenue and your expenses that are coming in and look at that. Now, if you're a seasonal business, take a look at your busy season and your slow season so you can get a good understanding of what that looks like so that you can cover off that bare minimum when you are in that slow season and you can start to look at saving. This is the benefit of looking at understanding what your baseline is. Who knew? Looking at a baseline was that easy. This is a really easy thing to understand because when you look at that baseline, you understand what your fixed costs are. These are things that have to happen, whether they're rent, your mortgage, your loans for things, your gas, all the things that are tangible that have to happen. What pay needs to come out. Now, I'm not going to discuss how you're going to draw that payout. That's not a conversation for another time, because it is complex depending on whether you're a sole proprietor, a partnership, or a corporation. That's going to differ. And the tax implications change as a result of that. But you do need to understand what you need to draw out in order to cover things like keeping a roof over your head, keeping food on the table, and your electricity running. So once you understand what that is, you also need to take into consideration your tax obligation. Trust me, I've had many conversations. It creeps up on you before you realize it. That identification that your employer former employer was covering your EI, your CPP, your OAS, well, you also do need to take that into consideration as well as your business taxes. So if you cover that aside, a simple fix is know it, know what the obligation is, have a bank account set aside to cover those off. And even better, if you make those remittances regularly. So then come tax time, come this time a year, April, next year, you're ready for it. And it's not such a sticker shock for you. Most of us know what we want to have our goals are for our revenue a year from now, five years from now, 10 years from now. But not all of us know what we want our baseline to be. And I want to keep in mind when we look forward, sometimes you got to take into consideration those things that you're going to do on a personal basis. Maybe you want to buy a new vehicle, maybe you're looking at a vacation, maybe you're looking at selling your house and buying a new one, understanding what your baseline is so that you can capture and capitalize on that and make sure that that rocky water is actually a little more smooth. That's hopefully within your purview to be able to do so. The second thing I want you to do is I want you to start thinking about what I call a decision filter. And these are three simple questions that you can actually ask yourself before you make any financial decisions so that they align with what I call your clarity compass. And that is your mission, your vision, your goals for the business, and how everything aligns to that so that it stops the bright, shiny objects from popping in. And you can actually make really tangible decisions on does this business idea or this opportunity that's popped up actually make sense? This really great deal on this machinery that popped up, can I actually absorb it? Or, oh my goodness, I am firefighting right now. I need to hire somebody. Well, if you stop and you look at it through a decision filter, you can actually make those decisions from a really informed place so that it's not going to impact your bottom line, your baseline in a negative way. Or if it is going to have an impact, you can look at it and say, well, what do I need to do to lessen that impact? So the first question you are going to ask yourself is, does this move me above my baseline or protect my baseline? And if it doesn't, you need to question yourself on that. Well, what is the impact of it? What are the downstream effects to the rest of my business? If it does pull me down the baseline, is that for a short period of time? Can I absorb that? Do I have savings in it to be able to cover that? Or can I increase the revenue temporarily to navigate through that? If you can, well, that is a worthwhile decision to look at, maybe an opportunity saying yes to. If it isn't, then it's worthwhile going, okay, is this opportunity something that I can come back to three months from now, six months from now, and revisit it? So it doesn't mean necessarily going to the other party involved, if there is another party, and saying no. It may be, hey, this is a really great opportunity. Can we revisit this in three months or six months? You don't have to explain why. You just have to recognize when does that fit in alignment with your financial planning? The second question that I want you to look at is: do we have the cash flow to absorb this in the next 90 days? Do we have that cash flow to absorb it? To be able to stabilize that business, do you know what's coming up in terms of your revenue in the next 30, 60, 90 days? So that if it does have that temporary dip, you're going to be okay. If it isn't, then what I mentioned earlier comes and applies. Do you run a sprint? Do you, uh, if you're a service-based company, do you do an extra event? Do you have a promotion that's going to help alleviate and bring you up so that you've got the ability over that 90 days to absorb it? That may allow you to be able to say yes. And then the third question, and it's really an important aspect of, well, what's the cost if I don't do it? And when you look at things through that idea of, well, what's the risk? What's the cost and the risk if I don't do it? Then you get the opportunity to start thinking creatively. Well, if there is a risk involved, what other options are there? Do I need to look at financing options? Do I need to go back to the vendor and say, hey, can we negotiate some sort of an agreement here and look at installment payments? If it really is something that is important, do you look at some angel investors? Do you take a look at what sacrifices can be made, either personally or in the business, in order to make sure this happens? It changes this from a reactionary type of mode to a very proactive decision that you can sit down and say, this is actually, this risk is worth the rate, worth the decision-making process to be able to do that. These decision filters, one of the questions that popped up last week is do are these the questions that you always have to ask yourself? And the answer to that is no. As you start to apply the decision filter, you're going to naturally identify in your business the questions that are going to apply to your business. This is a starting point. And the intention behind it is really just to get you thinking about what do I need to do to move my business forward? There's a brilliant business owner and networking guru in the States named Sandra Yancey. And she talks about from the financial decision is is this something that's going to make my cash register sing? Is this going to move my business forward? And is this going to impact my business in a positive way? There are many different decision filters you can put on this from a financial standpoint. The intention is to getting you thinking about it as opposed to reacting, being proactive and intentional versus reactive and potentially stressed out. And she knew she needed to make a hiring decision. She needed to get some individual in to help her with a key aspect of her business. But she recognized that A, um, there was issues if she didn't have it. We slowed down instead of being reactionary. She came into the office and we were sitting down having a conversation. She's like, I gotta get somebody in. I'm gonna, I'm going to drown. But we slowed down and we looked at it through the decision-making filter. And when she looked at it from that first question, it didn't make sense. We sat down and we looked at it, going, okay, does it move us above the baseline? She did not have the money to protect it. She did not have the cash flow right at the moment. But when we looked forward at the next 90 days, what we recognized is that, yes, at about day 70, there would be the cash flow to be able to cover that. And as she was projecting out further, we would be able to sustain it, or she would be able to sustain it. We looked at the cost of not doing it. The cost of not hiring immediately was not that impactful. As a matter of fact, she did not have the time to be able to train this individual. She had very specific expectations, very specific requirements that she needed the individual to support in the business. And there was a highly technical skill that was required. So by looking at this from a panic standpoint, she ran the risk of actually hiring the wrong person and potentially firing them down the road. And that can actually be a higher cost that the business may not be able to absorb. So the decision that she ended up looking at as a result of that was pushing off for another seven weeks, getting through and digging deep through the six weeks of the rush. Yes, it was painful, but it was short-lived. At the end of the day, what she was able to do was slow down, hire in an appropriate manner, get the right person in the seat, and her business was much better as a result of that. And it was just about slowing down and asking three critical questions to look at that as opposed to just going, oh my goodness, I need somebody and I need somebody now. Financial anxiety pops up when we don't look at things intentionally. Most of us have short-term financial anxiety, but we treat it like a long-term issue. And that can actually cost us more emotional upheaval in the long term, as opposed to slowing down and going, okay, if I look at this and I actually look at what I'm dealing with, it's not that bad. It's painful. I might have to rob Peter to pay Paul, but we can navigate through it at the end of the day. Maybe it means cutting back on the amount of eating out. Maybe it's a matter of holding things down or renegotiating and getting in suppliers, dealing with a few things. But it's often short-lived. The third thing I want you to look at is that 90-day view I was talking about and referring to earlier. It's it really is not looking at budgeting or forecasting. It is really just looking at what is in front of you specifically for the next 90 days. So, what's the revenue that you do have coming in based off of the information you know right now? How much of that is guaranteed? What of that is a little rocky? Because if that receivable may not be coming in on time, that's going to have a ripple effect for you. And just knowing how you need to navigate through that, it will allow you to make a stronger decision. And then looking at what are the expenses, both the recurring ones that are coming out, but also those random one-off ones that happen maybe once a quarter, once a year, once every five years, so that you can plan for it, as well as what are your tax installments? So you can navigate through that. Once you understand what that picture looks like, all of a sudden it increases your confidence because you know what you're dealing with as opposed to what you have without it, which is anxiety, question marks, and a whole bunch of I don't know. So I'm going to pivot and gamble about like a bunny. Once you know, there's power because you can make decisions, you can make choices, and you can navigate from that place. It stops the reaction mode and it allows you to move into those pieces of I got this. I can navigate. I can make those decisions. And if you start to get into that habit, all of a sudden that forecasting, not just 90 days, you can start forecasting six months, a year, or even longer out. That's the goal. But right now, we just need you to start looking at the next 90 days, knowing that eventually you'll be the type of business owner that starts looking at things in a much broader sense to be able to make bigger decisions. Start small and recognize it will grow from there. The identity shift that happens as a result of this is looking at this from a I'm the type of business owner who doesn't have a clue what's happening and I'm scared of my numbers, to I'm the type of business owner that confidently can make decisions in my business because I know the impact that a financial decision is going to make. A lot of times business owners feel that they're an island of one. Well, that you're not. There's communities that are built to be able to help navigate through these together. One of the ones that I have done myself is to create the right step ecosystem and the right step, the next right step community, both of which are community-minded groups that allow you to thrive, have conversations, and start to build confidence. The ecosystem is a 52-week program that allows you to go through an entire business cycle with a cohort of other business owners. And what you're actually doing in that is you are setting your annual plan, your three-year vision, and your five-year goals or 10-year goals, depending on your business. And then you're mapping out how are you going to do your one-year plan. And you're having an accountability group to be able to navigate that out through quarters. What do you need to do in the next quarter? What are the next things each month that you need to hit? And we work through each weekly goals that you need to have. So it's an accountability group. But even more than that, what we have the opportunity is to mastermind any issues that pop up two weeks out of the month with the rest of the pod that you're in. And then on one meeting out of the month, we actually set at the beginning of the month, what is your goal that you want to have? So that at the end of the month, you can look back through the rearview mirror and see, did I hit, did I hit it? Did I do the things that I needed to do that was moving my business forward? And if not, without judgment, go, okay, what do I need to do next month to make up for that? And if you did, let's celebrate that. And what is it that you need to do to keep that momentum going? So then you're rocking and rolling. Accountability is really, really key. And what I learned when I was a senior or leader in banking is that these groups of having like-minded individuals really help you get through when things are tough and celebrate when things are good. So I used to have a pod full of bank managers that we would get together on a regular basis. Sometimes we licked our wounds. Other times we were celebrating some success. But all the time, we were learning from each other. On the third, the last week of the month, one thing that we are doing is we're also bringing in experts so that you are learning from other experts, whether it's an IT, a legal, a financial, and operation expert, to say it might be a framework. It might be a different way of thinking. It could be a concept in terms of how to apply things from a financial standpoint. It's also how do you read things like a balance sheet and an income statement? And what the heck is a cash flow statement and why is it important to me? So all of those things we actually are looking at through the right step ecosystem. Now, how do you get to the right step ecosystem? Well, you fill out a quick quiz that I have designed, which is the right step reality check, business reality check. And this will take you 10 minutes to understand what is it that you need to stabilize in your business that's going to make a huge difference in how your business is run. What do you need to be discerning about in terms of your decision making? What do you need to align back to your goals and your mission and your vision? And what does you specifically need to execute on? So I want to thank you for joining me today. We talked about three different things that you can do in your business that are going to make a huge impact. It's all about your baseline. It's all about the base, about your base, so you don't get into trouble. We talked about your decision filter. Three simple questions that are going to help you move and make stronger financial decisions so that it has a ripple effect on the operations, on your marketing, on your team, and your own personal outlook on your business so you're feeling stronger and confident. And we talked about the importance of even a short-term 90-day view, which helps you to take control in your business. I am super thrilled that you're here with me, and I would love to have a conversation. Put in comment below what really is helping you move your business forward.