#111: Income Statement Explained and How to Use it to Grow

The Founder Podcast

Chris Lee

Business, Entrepreneurship

5 • 1.4K Ratings

🗓️ 21 June 2024

⏱️ 26 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Welcome to a new episode of The Founder Podcast! In this episode, we dive deep into understanding the financials of your business, focusing on building an income statement and conducting a break even analysis. Learn how to effectively assess your sales, costs, and margins to ensure your business is scalable and profitable.

https://nextlevelhomepros.com/june25thworkshop

Highlights:

"Not understanding the financials of your business could be costing you millions."

"There’s the traditional way to look at it with GAAP accounting principles, and then there’s the business owner way."

"Every dollar collected would mean 45 cents to the bottom line once you're breaking even."

"For every dollar I spend on marketing, it's going to equal $40 in revenue."

Timestamps:

00:00 - Introduction

01:30 - Importance of Understanding Financials

03:45 - Basics of an Income Statement

05:20 - Understanding Sales and Cost of Goods Sold

08:00 - Gross Profit and Gross Margin Explained

10:00 - Calculating Cost of Acquisition (CAC)

13:30 - Breakeven Analysis Breakdown

17:50 - Scaling Your Business Effectively

20:30 - Impact of Fixed Costs on Breakeven

24:00 - Workshop Announcement and Closing Remarks

Looking to scale your business? Want to learn directly from the same team that helped me sell my last business for 9 figures? Click this link below to check out how you can work with us.

https://nextlevelhomepros.com/grow-home-service-vsl

Join my community - Founder Acceleration ⁠https://www.founderacceleration.com ⁠

Apply for our next Mastermind: h⁠ttps://www.thefoundermastermind.com ⁠

Golf with Chris: h⁠ttps://www.golfwithchris.com ⁠

Watch my latest Podcast

Apple- ⁠https://podcasts.apple.com/us/podcast/the-founder-podcast/id1687030281S ⁠

Spotify- ⁠https://open.spotify.com/show/1e0cL2vI1JAtQrojSOA7D2 ⁠

YouTube - @thefounderspodcast

Transcript

Click on a timestamp to play from that location

0:00.0	Not understanding the financials of your business could be costing you millions.
0:04.8	In this episode of the founder podcast, we're going to help you understand an income statement
0:09.7	and build a break-even analysis.
0:12.6	When it comes to building out a roadmap for your business,
0:15.4	it's important to know where you're starting
0:18.5	so that way you can know where you want to go.
0:21.2	And we're going to teach you all of this
0:23.1	on this episode of the founder podcast.
0:26.1	All right, so we are going to jump into the income statement
0:30.0	and really be able to understand is my business scalable how are the different functions
0:36.1	break-even analysis all that good stuff so jump on over to the iPad with me we over here have just a basic income statement that goes over what really any
0:48.1	business owner has to take a look at. Sales, this is the amount of revenue that comes into the business.
0:55.0	This is after taxes and everything. I like to look at it.
1:00.0	You know, there's a traditional way to look at it with gap accounting principles, and then there's the business owner way of looking at it.
1:07.0	For me, when I'm looking at sales, this $200,000 number, I'm looking at everything after sales tax. I'm looking at
1:15.0	everything after dealer fee if I'm paying a finance fee or whatnot. Like
1:18.8	dollars that are deposited into my bank account that allow me to go and create expenditures from.
1:26.0	So that's the number that I need to understand in my business.
1:29.2	Once again, there's ways to do things in accounting and then there's ways for you as a business owner to really
1:34.3	understand that. You need to understand how many dollars are coming in, not how many you
1:37.8	sold or hope to get or whatnot, but dollars in the door for work that you have completed. That is this number that you want to be looking at.
1:46.5	Then we have what's called the cost of goods sold. So
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Chris Lee, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Chris Lee and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.