Ep. 25 - Financial Facts or Feelings? - Road Snack Episode

Financial Facts or Feelings? How to Use Data to Overcome Overwhelm and Drive Decisions

In this solo episode, Liz Szporn of CEO Sisters Road Trip shares a simple but powerful approach to gaining instant clarity on your financial health. Whether you're feeling overwhelmed or unsure about your business’s numbers, learn how to cut through the noise with just a few key data points to make confident decisions.

Key Topics:

• The common "ostrich effect"—avoiding financial data and its impact on decision-making
• How to identify what financial data truly matters during times of overwhelm
• The story of a client with a perceived 20% revenue drop that was actually a 5% increase
• The three KPIs to focus on for quick financial clarity: top line income, expenses, and net income
• The power of looking at year-over-year comparisons for meaningful insights
• Using curiosity and a "what if up" mindset to reframe perceived negatives
• Practical steps: pulling and comparing financial statements from the past quarter and last year
• How to categorize expenses into necessary, nice-to-have, and negotiable
• Actionable tips for renegotiating vendor contracts and cutting unnecessary costs
• The importance of trust, curiosity, and data in business decision-making

Resources & Links:

• Instant Clarity Worksheet

Connect with Liz Szporn:

• LinkedIn
• www.yourbusinessmatters.dev

Remember, small steps with data can lead to big clarity. Don't let overwhelm hold you back—your business's health is worth regular check-ins! 

Want to learn more about what working with Liz looks like?  Head to Your Business Matters to schedule a Discovery call with her

Transcript

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What's coming up ahead?

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Hi there, this is Liz of CEO Sisters Road Trip, and I'm on my own today, friends. Sarah is on the road going to uh upstate New York for one of the, I think it might be the final baseball tournament for her for Jonah. And so she's up there spending time with him the senior year. We gotta grab every moment, squeeze all the juice, right? So have fun, Sarah. Good luck, Jonah. Today I'm doing something a little different because of that. Today I'm giving you what I'm lovingly calling a road snack. What a road snack is, is a little piece of information that has come out of a coaching session that I had, comes out of some of the content that I share and work through and exercises that I work through with my clients. Every one of these, I want to be able to share the story, share the strategy that I'm using, and then share an action feeling or sorry, an action step of like what can we do? And then I will give you a tool to be able to do it yourself. There's a lot thrown at us as business owners. We know this. We're on a long road trip. And so every time we can have a quick little snack and learn something new to make better intentional decisions down the road, I'm calling it a win. All right. So here's our first one. This road snack we're calling instant financial clarity. Many people don't feel comfortable with their numbers. They know they need bookkeeping. We know we have financial statements, we know we make decisions. Many people make decisions from feeling as opposed to from data. I believe we need both. Trust your gut for sure, and then go look at the data. What we tend to do is bury our head. The ostrich effect, we all know this one, right? You're like, I'll deal with that later. I don't want to talk about it. I don't know. It's not great. I know it's not great. That's what people feel. I'm gonna share the story. So here this is actually what happened a couple weeks ago. I was working with a client and they were really panicked. They're not in a good space in a couple different places, which happens. Life is hard, life is uh lifing, as I like to say. And this person's got a lot going on personally as well as professionally. They're feeling overwhelmed, they're feeling stressed out, they're feeling like they don't, they can't get ahead, all of these things. These feelings are real. This like the my client said to me, I'm really freaking out. I need new clients, I need more revenue. I said, Okay, tell me more. What's happening? Well, I think we're down, I think our revenue is way down. I said, Okay, how what do you what do you mean? What do you think? And they said, I think it's down 20%. And I said, Holy cow, really for the first quarter? And they said, Yeah, it's terrible. I don't, I don't have enough. I'm really freaking out about revenue. And I said, Oh my gosh. All right, so what did the financial statements tell you? And they said, I didn't look at them. And I said, Oh, okay. So where do you how do you know it's down 20%? Is that something you feel or something you know? I just feel it. I just I know because I don't have enough money. And I said, Okay, yikes, 20% is no joke. Did you look at the financial statements at all? Do you look at those to make decisions? No, I don't have to. It doesn't matter. What would that teach me? What would that tell me? And I said, Okay, it can tell us quite a bit, it can help us understand where we can go next. Would you mind if I looked at your numbers and did a little report for you and showed you just on three or four different pieces of information what I found? Would that be okay? And they said, yes, fine. So I did. I dived in and I just looked at four different indicators, four different pieces of data. I looked at the top line revenue. This person's in manufacturing, so I also looked at the gross profit, what happened after they made their materials or their, you know, they did the thing that they do. What are their total expenses each month? And then what is the net income? What's happening at the end? Now, this client said I'm down 20% in revenue, and I said, Boy, that seems like a lot. So I'm looking, I compared the first three months of 2025 last year to the first three months of 2026 this year. What I found was not that. There is a challenge, there is something that is not working to cause that feeling of I don't have enough. But it is not what they thought it was. What this person thought it was was something else. Actually, they're up 5% in revenue over a prior year. The first Q1 of prior year. They're up 5%. Woo! Better than 20% down. That's a 25% swing in my books. Ta-da! Magic. Or data. So then we look in it and say, well, something's not working because when I look at that net income, it is down. It's not awesome. But it's not the revenue at this point. It's the expenses. So what I was able to see is their expenses are actually up at 16%. So there was a 20% something there, if we're rounding up, but it wasn't income. Knowing this information, showing this information to this client allowed them to feel like, ah, okay. I could physically feel the relief. I could hear it in their voice. And then I was able to say, are you ready to dive in to what's next? There are two things that we're doing. One, we started a campaign to re-engage existing clients and former clients. Great. We're gonna focus on revenue. Of course we are. We're gonna focus on drumming up new business, on filling that pipeline. Of course we are. But now we know what we also can do for almost like a quick win, which I love a good quick win, is to dive into those expenses and decide what we really need, what is a nice to have, what is necessary, where we can be more efficient, what we can negotiate. We can play a different game because we see data, which is what we did. So I love this story. I love being able to do this kind of work with clients. This person was like, oh my gosh, I mean, it's not great, but it's not what I thought. That unclouds us and allows us to feel a little bit better, which means we can make a better intentional decision about where we're going next. Here's the exercise. Number one, open your accounting software, get your financial statements, choose a period of time. It's as of recording this, we've gone through the first quarter of this year. I love quarters. I think that's a great way to assess what's happening while things are not so far off course for the year that you've already planned. So open your software, your accounting, run a profit and loss for January, February, and March for this year and January, February, and March from last year. Create a very simple comparison. You can use the sheet that I'm gonna share with you. Do that. Just input your numbers, keep it basic. We could get fancy later. Let's just do some stuff. You know what I'm saying? Keep it simple. Don't look at your bank account balance because that's not right yet. We're looking at what has happened. We're gonna come to the bank account later. Not today, later, but we do need the bank account. Compare those totals. Are you actually down as much as you thought or felt in revenue? Are you actually as high as you thought or felt with expenses? I bet there's a middle ground in there. But being able to understand where the issue, challenge, fear, concern, feeling is coming from allows us to do this. The goal here of this exercise is to get a quick win of acknowledgement and clarity. That's what this does. You get to work with someone like me or someone in your group, in your in your life to help you make, help you understand what to do next, but now you actually know what's going on. What I want to offer and what I'm offering is the next step as well. Once you have the clarity, you can make a better decision. On the second tab of the document that I'm sharing, we're gonna be able to do a little bit of an expense analysis. And we're going to keep it again very simple, and we're gonna categorize things that are necessary, mandatory, whatever word you want to use, right now, meaning expenses we can't cut or we don't want to cut first pass. We're gonna look at what's a nice to have? What is something that we are just looking at that we haven't renegotiated in a while? So, where can we renegotiate or see how we can change the pricing of this to move forward? And then it was what is you know something that we're just gonna keep. So we're going to acknowledge what the expenses are, the categories that they're in, and then we're gonna make some calls. We're gonna call to renegotiate our credit card uh billing, maybe. Maybe we're gonna renegotiate with a vendor to say, hey, listen, I've been one of your best clients for years. I'm you're charging me 15% for this thing. Can we go down to 10%? Where's the wiggle room? People love talking about this stuff. They're happy to have these conversations. This is my snack for today. Financial clarity, make quick win decisions on expenses, and keep moving. That's it. That's my road snack episode for today. I liked it. I like episode one of these. I hope it was helpful. And I really encourage you to find your financial statements, give them a look, clarify some data to understand the difference between fact and feeling, and then be able to make a quick win decision of cutting in expense, renegotiating expense, or doubling down. All right, you got this. And remember, your business matters, and it really matters to me.