Maria Braun

Basic indicators every entrepreneur should know.

Running your own business and have your hands full? That's great, but... are your activities actually translating into profit?

Many micro-entrepreneurs - especially those who started out out of passion - confuse high revenues with real earnings. Lack of knowledge of basic financial indicators means that you can work from morning to night and still have a void in your account. And this is a straightforward path to frustration, burnout and a feeling that ‘something is not right here’.

It is just as often the case that an entrepreneur knows how to distinguish between revenue and profit and has sufficient knowledge of the subject, but passion and the desire to prove to himself and those close to him that he will succeed, or, just as importantly, the fear of failure, prevent him from thinking logically and wondering whether all this work makes sense at all. 

In my previous business, selling toys to both individual customers (B2C) and businesses (B2B), I had daily contact with shop owners. A couple of conversations particularly stuck in my mind. On one occasion, I went to a neighbourhood bookshop to propose a partnership and, in the process, ask how things were going. The owner told me that she didn't even know if her business was profitable, but she preferred not to know, because what would she do if it turned out that she wasn't making any money....

Another time, when the bailiff was seizing all the merchandise in a toy shop because of debts, the owner told me: you know Maria, all in all it's good that this happened. I will no longer have the dilemma of whether I should continue with the business or not. The handle was down, the bailiff was taking the goods, so the decision made itself!

These two conversations are really hard to forget. In contrast, it is common for small shop owners to live from day to day. The day's profit is used for private expenses (because you have to buy bread for home from something) and then to pay the most urgent company invoices. And how do you distinguish between urgent and less urgent expenses when cash is generally in short supply and it is clear that there is not enough for everything? Unfortunately, business owners have their own ways of doing this too. In trade, the way it works is that they pay for the goods that are most needed in the shop and most desirable to the customer. Example: if a trader has a backlog of, say, 10 invoices, and these include niche suppliers, without whom the shop can operate, and invoices for, say, Lego, which is a must-have item on the shelf, the Lego invoice must definitely be paid first. The less important supplier has to wait. Social security and salaries also tend to have a high priority, although sometimes these institutions can also be treated as a higher-interest loan.

Unfortunately, the world of large corporations and salaried people is very different from the world of micro-enterprises, which is why I find it hard to listen to discussions about how well entrepreneurs are doing in the context of political discussions about lowering health care contributions.  

In this article, I'll show you what five indicators you should know in order to be able to consciously manage your money and grow your business - whatever your industry.

Revenue is not profit

At first glance, everything seems to fit: you sell, customers pay, something appears in your account. This means the company is making money, right?

Not necessarily.

Revenue is all the money that comes in from selling your products or services.

Costs are all the expenses involved in running your business - from materials, to social security contributions, to advertising and system fees.

Net profit is what you are left with on a pure basis - after everything has been paid for.

Example:
Agnieszka runs a handicraft studio. In March, she had a revenue of PLN 12 000. But after deducting the costs of materials (4 000 PLN), online shop commissions (1 500 PLN), advertising (1 000 PLN), social insurance and accounting (1 800 PLN), shipping and packaging costs (1 000 PLN) - she is left with... 2 700 PLN.

Of this, tax still has to be paid. Does Agnieszka earn money? Yes. Does she work for as much as she would like? That is another matter.

Fixed costs and variable costs

Knowing your cost structure allows you to make smarter decisions.

- Fixed - they don't change, even when you're not selling: Social Security, rent, accounting.

- Variable - dependent on sales: materials, commissions, shipping, advertising.

What “eats up” profit often lurks in fixed costs. And they are the biggest burden when sales are down.

Profitability

That is, whether your business generates a surplus that you can:

- put it aside,

- pay yourself an owner's salary,

- invest in growth?

Profitability gives you breath. And reassurance that you are not just working, but profiting.

Break-even point

This is the point at which revenue covers all costs. Up to this point, you are working “at zero”. - only then do you start to make real money.

It is worth knowing and monitoring - e.g. monthly or quarterly. It is one of the most important strategic indicators.

What should you do if you are not satisfied with the figures?
Don't panic. The most important thing is that you know what you are dealing with. Now you can act.

🔍 Ask yourself questions:

• Are my prices realistically calculated?
• Am I offering too many “freebies” or too low a rate?
• Am I investing in activities that do not pay for themselves?
• Can I automate or delegate some tasks?

If you don't know where to start - let's talk. During the consultation, I'll help you look at your business ‘in numbers’ and come up with concrete recommendations.

To sum up
your business can be passionate, creative and valuable. But to make it profitable too - you need to know some key numbers.

Not so you can turn yourself into an accountant. But so that you can make decisions with courage. Because only then are you building a business that will truly sustain you - and give you freedom.

What's next?
✅ Count how much you really earn

✅ Make an appointment for an individual consultation

Adres

ul. Złota 11
00-123 Warszawa

Contact

kontakt@mariabraun.pl

+ 48 697 993 960

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