Sales are coming in. You’re busy, your team’s busy, and you might be turning over more than you were this time last year. By every outside measure, the business is doing well.
Then you open the banking app and think: where is it?
If that sounds familiar, you’re not alone. It’s one of the most common things I hear from business owners: “I’m making good money, so why do I feel broke?” And the natural reaction is to assume the answer is more sales.
But it might not be. You might already be making enough money. The problem might be what happens after the money comes in.
Revenue, profit and cash are three different numbers
Let’s start with the confusion that sits underneath almost everything else.
Revenue is not profit
Say your business does 100,000 this month. That doesn’t mean you made 100,000. Out of that comes wages, super, contractors, software, rent, marketing, insurance and all the costs of delivering whatever it is you sell. After all of that, maybe you’ve made 10,000.
That’s the number I care about. What did you actually keep?
We love talking about revenue. Six figures, seven figures, million-dollar businesses. But if a business is doing a million in revenue and keeping 30,000, I’m not going to be impressed by the million. I want to know what’s happening underneath it.
Profit isn’t necessarily cash
This is the one that really trips people up. Your accountant tells you that you made 100,000 profit this year, and you look at your bank account wondering where on earth it is.
There are plenty of reasons profit and cash don’t match:
- Clients haven’t paid you yet
- You’ve bought stock
- You’ve paid down debt
- You’ve taken money out
- There’s tax still to pay
- Cash is tied up somewhere else
So you can absolutely have a profitable business and still have cash flow pressure. That’s why I never want you looking at one number in isolation. You need the whole picture.
Six reasons you’re making money but still feel broke
1. All your money sits in one account
A client pays you 10,000. Then another pays 5,000, then another 20,000. It all lands in the same account, and you look at it and think, “I’ve got 35,000.”
You don’t. That money has lots of different jobs. Some of it is GST. Some needs to go to tax. Some is for wages, some for operating expenses, some to pay you and, hopefully, a bit for profit. Because it’s all sitting together, it looks like more than it is, and that’s where business owners get themselves into trouble.
2. You’re not putting tax aside
I’ve seen this so many times. BAS comes around and suddenly there’s a 20,000 bill to pay.
But that bill didn’t suddenly appear. The GST was coming in every time a customer paid you. The problem is it was sitting in your everyday account, so it got used. Wages, suppliers, bills. You ran the business with money that already had another job, and then the ATO wanted it.
That’s why I love separating tax. I don’t want you getting to BAS time and wondering how you’ll pay it. I want the money already sitting there. It’s boring, and that’s exactly how I want tax to be.
3. Everyone gets paid except you
Your employees get paid. Your contractors get paid. Xero gets paid on the first. Your landlord, your suppliers, even the ATO all get paid. And then there’s you.
You built the business. You took the risk. You’re probably the one still thinking about it at 10 o’clock at night. Your business should be paying you, and I don’t mean randomly transferring money whenever the account looks healthy. I mean an actual plan for your pay.
What should the business be paying you? What does it need to generate to support that? And if it can’t afford it right now, why not? Sometimes the honest answer isn’t that the business needs more revenue. Sometimes it’s that the business is spending too much.
4. Revenue went up, and so did everything else
The business grows, so you hire. You add another piece of software, another contractor. You upgrade. Marketing spend increases. None of these look like bad decisions on their own. Most of them are perfectly reasonable. But nobody stops to look at what they’ve done collectively.
Here’s how it plays out. Revenue goes from 50,000 to 70,000. Amazing. But expenses go from 40,000 to 60,000. You’ve got more clients, more work, more people to manage and more responsibility, and you’re keeping exactly the same amount.
That’s when I start asking why we’re bothering to grow. I don’t want you building a bigger business just to say you’ve got a bigger business. I want you building a better one: a business that pays you, makes a profit and could be a saleable asset one day.
5. You’re not looking at what it costs to make money
In a service-based business, a big part of your cost is usually people. So if you sell another 20,000 worth of work, that’s great. But what did it cost you to deliver it? Another team member? More contractor hours? More software? More of your own time?
If it costs you 18,000 to deliver 20,000, we need to talk.
Product businesses face the same question in a different form. Sales might look strong, but how much cash is tied up in stock? What did that stock really cost once you add freight, duty, storage, tariffs and delivery? What are you actually making when you sell it?
Revenue on its own answers none of those questions. That’s where margins matter.
6. You’re running the business from your bank balance
You open the app, see 50,000, and your brain goes straight to “we’re good.” Then someone asks whether you want to spend 10,000 on something, and you think, sure, we’ve got 50.
But what is that 50,000 already committed to? Payroll, GST, tax, super. Maybe you’ve only really got 12,000 to spend.
Your bank balance is useful, but it’s not a strategy. It doesn’t tell you what the money needs to do next.
How to fix it: give every dollar a job
People often expect me to hand over some complicated financial formula. I won’t, because the starting point is simple.
Give every dollar a job before you spend it.
When money comes in, decide what it needs to do before you start spending it. How much goes to tax? To owner’s pay? To profit? To operating expenses? If you sell products, how much goes to cost of goods sold?
Now there’s a plan.
This is where I use Profit First. Not because I want you opening 500 bank accounts, but because I want you to be able to open your banking app and understand what’s going on at a glance. That’s my tax money. That’s my operating money. That’s my pay. That’s my profit.
Once the money has a purpose, the guesswork goes.
What Financial Calm actually means
When people hear “financial calm,” they often picture a big pile of money sitting in the bank. That’s not what I mean. You can have 100,000 in the account and still be stressed because you don’t know what it’s for.
Financial Calm is knowing. Knowing what’s coming in and what’s going out. Knowing what you need for tax and what you’re paying yourself. Knowing whether you’re profitable and what’s coming up.
And when someone puts an opportunity in front of you, you can actually make a decision. Can we hire? Let’s look. Can we spend 10,000 on marketing? Let’s see. Can I increase my pay? Let’s have a look. Can we afford this new software? Let’s check.
You’re not guessing. You’re using the numbers to decide. That’s the shift from being busy in your business to being a Money First CEO.
Start here: the three-month check
Here’s something you can do this week. Look at the last three months and write down how much revenue came in. Then ask yourself where it went:
- How much went to your team?
- How much went to operating expenses?
- How much went to tax?
- How much went to you?
- How much was actually left as profit?
If you can’t answer those questions, that’s your starting point.
Making good money is only half the job
Making good money doesn’t automatically mean you’ll have more money. Without a system for what happens once it comes in, you can keep growing revenue and still feel exactly the same.
That’s why I created the Financial Calm System. I kept meeting business owners who were making good money but didn’t feel in control of it. They didn’t need someone telling them to “reduce expenses.” They needed to know which expenses, by how much, what the target should be, what to pay themselves and what to put aside for tax.
Over 90 days, we look at where you are now, put the structure in place (with Profit First as part of it), work through your expenses, cash flow and owner’s pay, and then implement, review and adjust. The goal is a system you can keep using long after we’re done.
If you’re making good money but honestly don’t know where it all goes, book a discovery call and let’s have a chat about what’s happening in your business.
