A Letter From Your Future Self: 5 Financial Numbers That Will Change Everything

Dear you,

I see how you've been feeling about your business finances lately. Overwhelmed. Maybe even avoiding them because spreadsheets and calculations just aren't "your thing." I understand - truly.

You've been focusing on what you love—serving clients, creating amazing products, building your vision—while the financial side remains this cloud of anxiety hovering over you. I remember those feelings well.

But I want to share something important: understanding your numbers isn't about becoming an accountant. It's about giving yourself the clarity to make decisions that serve both your business AND your wellbeing. The kind of decisions your future self will thank you for.

Let me tell you about five financial numbers that transformed everything for us. I'll explain them like we're having coffee together—no accounting jargon, I promise.

1. Profit Margin: What's Actually Yours to Keep

Remember that feeling when you'd look at your revenue and feel momentarily rich, only to watch it all disappear to expenses? That's why I started paying attention to profit margin.

It's beautifully simple: profit margin shows how much of each dollar you earn actually stays with you.

How to find it: Take what's left after ALL expenses and divide it by your revenue, then multiply by 100.

If you earn $100,000 but only keep $20,000 after expenses, your profit margin is 20%.

What I wish you knew sooner: Many business owners are shocked to discover their true profit margins. Some are running on razor-thin margins without realizing it, wondering why they're always stressed about money despite "good revenue."

When I discovered our margin was lower than it should be, I realized we had two choices: increase prices or decrease expenses. The answer wasn't cutting back on everything—it was being intentional about where our money went and making sure our pricing reflected our true value.

2. Cash Flow: Why You Can Be Profitable on Paper But Broke in Reality

Remember those months where the business looked great on paper, but you were scrambling to pay bills or—worse—yourself? That's a cash flow issue.

Cash flow tracks the actual money moving in and out of your business in real time, not just theoretical income and expenses.

How to track it: Simply watch your total cash inflows minus total cash outflows over a specific period.

What changed everything for me: I realized our "profitable" business couldn't pay us consistently because cash was tied up in unpaid client invoices and poorly timed expenses. Financial statements showed profitability, but our bank account told the real story.

When I started watching cash flow weekly, I noticed patterns—certain clients were always late with payments, and our biggest expenses hit during our lowest-income times. This awareness alone transformed our financial peace of mind.

3. Customer Acquisition Cost vs. Customer Lifetime Value: Are Your Relationships Worth It?

This pair of metrics answered a crucial question for me: was the money we spent to get new clients worth it compared to what those clients brought to our business over time?

How I calculated it:

• Customer Acquisition Cost (CAC): Total marketing and sales expenses divided by number of new customers
• Customer Lifetime Value (CLV): Average purchase value × average purchase frequency × average customer lifespan

What I wish I'd known earlier: We were investing in marketing without knowing if it was actually paying off. Without these numbers, we were essentially guessing.

Once I started tracking this, I aimed for a CLV at least 3 times higher than our CAC. When we discovered we were spending $300 to acquire clients who only brought in $350 total, we adjusted our strategy. Focus on the relationships that sustain you.

4. Inventory Turnover: Is Your Product Actually Moving?

If you sell physical products, inventory that sits on shelves is essentially money trapped in limbo—not helping you grow and not available for other needs.

How to calculate it: Cost of goods sold divided by average inventory value.

What I finally learned: I had fallen in love with certain inventory items that customers simply weren't buying. My emotional attachment to products that weren't selling became an obstacle to our profitability.

When I started tracking this, I realized which products were moving efficiently and which weren't. For the slow movers, I created sales, bundle offers, or simply stopped restocking them. Remember: inventory sitting on shelves isn't just unsold product—it's cash you can't use elsewhere.

5. Debt-to-Equity Ratio: Is Your Foundation Stable?

This metric shows how much your business relies on debt versus its own resources. Think of it as your business's financial stability score.

How to calculate it: Total liabilities divided by total equity.

What brought me peace: Some debt can help your business grow, but too much creates stress and vulnerability. I was constantly anxious about our business because we were overextended with loans, lines of credit, and credit card debt.

When I discovered our ratio was too high, I focused on paying down debt before taking on new projects. A lower debt burden gave us more flexibility and peace of mind when unexpected challenges arose.

A Note From Your Future Self

These numbers aren't just metrics—they're the compass that helped me navigate our business journey with intention. When I understood them, I gained the clarity to make decisions that supported both business growth AND personal wellbeing.

I believe your business should serve your life, not consume it. Financial clarity isn't about obsessing over spreadsheets—it's about having the information you need to create a business that aligns with your values and vision.

The peace that comes from knowing these numbers is worth every minute spent understanding them. Trust me—your future self will thank you.

With care for your journey, Your Future Self 💙