How to Understand and Use Your Financial Data

Financial data might sound like something reserved for accountants, analysts, or business school grads—but here’s the truth: if you’re running a business, especially as a solopreneur, you need to understand your numbers. That doesn’t mean you need to become a financial expert. It means learning how to see the story your numbers are telling you—without getting lost in the jargon.

If you’ve ever felt overwhelmed by spreadsheets, confused by cash flow, or unsure what to look at when making decisions, you’re not alone. This guide is designed to help you cut through the confusion, understand the most important aspects of your financial data, and actually use that information to grow and sustain your business with confidence.

Why Financial Data Matters

At its core, financial data helps you answer three simple questions:

1. Am I making money?

2. Can I afford my expenses?

3. Is my business growing in the right direction?

When you understand your numbers, you’re not guessing. You’re not relying solely on intuition or vibes. You’re making informed, empowered decisions that protect your time, energy, and resources.

Start with the Basics: What Financial Data Should You Track?

You don’t need to monitor every single metric under the sun. Focus on a few foundational numbers:

1. Revenue

This is all the money coming into your business from sales, services, or other income sources. You can track this monthly, weekly, or even by project.

Pro Tip: Break it down by offer or product. Which services are your top earners? Which ones take the most time?

2. Expenses

These are all your costs—software, subscriptions, contractors, supplies, etc. Knowing your expenses helps you keep your profit margins healthy.

Tip: Categorize your expenses so you can quickly see where your money goes (e.g., marketing, admin, tools, client delivery).

3. Profit

This is what’s left after expenses are subtracted from revenue. It’s your real income—not just what you earned, but what you kept.

Profit = Revenue - Expenses

This is one of the most important numbers to watch. A high-revenue business isn’t sustainable if it’s not profitable.

4. Cash Flow

Cash flow tracks money moving in and out of your accounts. It shows whether you have enough money available to pay bills, pay yourself, and invest in growth.

Even profitable businesses can have cash flow issues if income is delayed or expenses pile up too quickly.

5. Accounts Receivable / Payable

These track what’s owed to you (receivables) and what you owe others (payables). This helps you stay on top of unpaid invoices and avoid late payments.

Understand the Story Behind the Numbers

Once you have these numbers, the next step is to use them. Here's how to interpret the data without the jargon.

Look for Trends

• Are your sales going up, down, or staying flat?

• Are expenses growing faster than your income?

• Do you notice slow seasons or months with higher demand?

Example: If you see a dip every December, that’s not necessarily a problem—it’s a pattern you can plan for. Maybe you save extra in November or plan promotions earlier in the year.

Calculate Simple Ratios

You don’t need complex formulas. Just a few basic percentages can tell you a lot:

• Profit Margin = (Profit ÷ Revenue) x 100
  Tells you how much you’re actually keeping.

• Expense Ratio = (Expenses ÷ Revenue) x 100
  Shows how much of your income is being spent.

Healthy profit margins vary by industry, but aim to keep at least 20–30% if you're a service-based solopreneur.

How to Use This Info in Real-Life Decisions

Here’s where things get exciting: your financial data is more than numbers—it’s a decision-making tool.

Pricing

Are you charging enough? If your profit margins are too low, you may need to raise your prices or trim expenses.

Your data will show you whether your business is sustainable at your current price point.

Marketing

Track which offers bring in the most revenue. Double down on what’s working. If one program barely breaks even, it might not be worth your time.

Timing Your Investments

Knowing your cash flow patterns helps you plan big expenses like hiring, rebranding, or launching a new offer—so you don’t run into a cash crunch.

Paying Yourself

Many solopreneurs either don’t pay themselves enough—or at all. Your financial data helps you determine a consistent, sustainable owner’s draw.

How to Make This Simple (Even If You Hate Numbers)

Let’s be honest: staring at spreadsheets isn’t everyone’s idea of fun. Here’s how to make financial tracking and decision-making easy:

Use a Template

Start with a pre-built spreadsheet or digital finance tracker. Customize it to your business, and update it regularly (weekly or monthly).

Pro Tip: Use color coding to spot trends easily—green for growth, red for problem areas.

Use Tools You’ll Actually Open

If you love Google Sheets, use that. If you prefer apps, try tools like Wave, QuickBooks, or Notion. The best system is the one you actually use.

Set a Money Date

Schedule a recurring “money check-in” once a week or once a month. Review your income, expenses, and goals. Light a candle, make tea, play music—whatever makes it feel less stressful and more sacred.

Get Comfortable Asking Questions

You don’t have to know everything, but you do have the right to ask questions—especially when working with a bookkeeper or accountant.

Here are a few good ones to start with:

• “What does this number mean?”

• “Is this trend something to be concerned about?”

• “How can I improve my cash flow or profit margins?”

• “What would you recommend I focus on next?”

Redefining Your Relationship with Numbers

For many women entrepreneurs, money and numbers have been sources of anxiety, self-doubt, or avoidance. But it doesn’t have to be that way.

Understanding your financial data isn’t just about business—it’s about ownership. It’s about stepping fully into your role as CEO, creator, and leader.

You don’t have to be perfect.
You just have to pay attention.

And when you do, you’ll find that your numbers become your allies, guiding you toward smart decisions, sustainable growth, and unapologetic worth.

Final Thoughts

You deserve to feel confident with your finances—even if you’re just starting out, even if math was never your strong suit. By focusing on a few key metrics, tracking consistently, and interpreting the story behind the numbers, you’ll make better decisions and build a business that supports your vision.

You’re not just a creative, a coach, or a service provider.

You’re a CEO.

And CEOs know their numbers.