Section 17

Business Financial Basics

The numbers every operator should be able to recite from memory.

Monthly recurring revenue ($)

One-time project revenue ($)

Monthly costs ($)

Revenue

$23,000

Profit

$14,000

Margin

61%

ARR (from MRR)

$180,000

Total money earned in a period. Track recurring vs one-time separately.

Revenue minus all costs. If you don't know your profit, you don't have a business.

When money actually moves. Profit on paper means nothing if cash is empty.

Target 50%+ for service businesses. Below 30% means you're underpriced or overstaffed.

Project 90 days of revenue + costs every Monday. Make decisions early.

Raise prices for new clients first. Reprice existing clients at renewal with a value story.