Episode 14: The Financial Reports Every Creative Needs

  📍 Welcome to CreativeMind Smart Money, the podcast where creativity and business smarts collide. I’m your host, Samantha Eck, bookkeeper, business coach, and your go to guide for building the creative business of your dreams. Whether it’s mastering your money, streamlining your systems, or growing your business, I’m here to share insights that empower you to thrive.

Plus, I’ll be bringing in industry experts to dive into all aspects of entrepreneurship, so you can turn your passion into profit without losing your creative spark. Let’s get started.

 You’re listening to the Creative Minds Smart Money Podcast, where creativity and business smarts collide. All right, friends. Today we’re diving into a topic that most creative entrepreneurs avoid like last season’s trends, financial reports.

But here’s the thing. You can’t avoid them forever. No, no. If you want to grow and stay in business, you need to know these reports like the back of your hand. Now, don’t roll your eyes at me. I promise by the end of this episode, you’ll actually be excited to dive into your finances. Okay, maybe not excited, but you’ll definitely feel more empowered.

Let’s break this down in a way that’s easy, manageable, and dare I say fun. Ready? Grab a coffee, a notebook, and let’s get into this. Okay, let’s just get something out of the way right off the bat. I know most creatives would rather be well, Creating, not crunching numbers or reading reports. I get it. I’ve always been a creative at heart, but here’s some real talk.

You can’t just be creative and hope your business grows on vibes alone. We need those numbers. Financial reports are like the GPS for your business. Without them, you’re just driving in circles, hoping you’ll accidentally end up at Successful. Spoiler alert, you won’t. You need directions, You need data. You need to know if what you’re doing is working, or if you’re throwing cash at something that’s as useful as a screen door on a submarine.

I said it. So today, I’m breaking down the financial reports that every creative needs to know. And trust me, this isn’t as intimidating as it sounds. No jargon filled nonsense here. We’re going to keep it real, we’re going to keep it simple, and most importantly, we’re going to make it actionable. Um, First up, the profit and loss statement, or as I like to call it, the how much did I really make report.

Listen, it’s easy to get all excited when the money’s rolling in, you land a few clients, you’re invoicing like a boss, and it feels like you’re finally on the up and up. But then, wait for it. You’re hit with the end of the month and you’re like, wait, where did all my money go? Cue the P& L report.

Your profit and loss statement breaks down exactly what you brought in. Your revenue and what went out, your expenses. It’s basically your business’s monthly receipts, income in, expenses out. Did you make a profit or not?

The beauty of the P& L is that it can tell you exactly where you’re overspending. Too much on fancy software you barely use? Time to cut it. Ordering takeout every day in the name of client lunches? Yeah, no. The P& L is the wake up call we all need. It doesn’t lie. Now, I want to clarify that if those client lunches bring you a lot of joy and you feel like they have some sort of benefit to your business, that doesn’t mean that you can’t have them.

Especially if you love going out for those morning coffee dates with a client or you love to network over coffee, it doesn’t mean you can’t have it. But the P& L, again, it doesn’t lie. It shows you exactly where your money has gone. It gives you that insight and that’s exactly what you need to grow your business.

Let’s be real. Sometimes it’s more of a loss than a profit statement, but that’s okay. It’s better to know the truth now than to wake up one day wondering why your bank account is giving you some serious side eye. Next up, the balance sheet. Now I know what you’re thinking, Samantha, this really sounds boring.

But hold up. The balance sheet is actually pretty dang important. Think of it as your business’s financial snapshot. Here’s the tea. The balance sheet tells you what you own, which are your assets, what you owe, which are your liabilities, and what’s left over, which is your equity. It’s like checking in on the overall health of your business.

Are you financially solid or are you running on fumes? For my creative entrepreneurs, this is a big deal. You can have the best ideas in the world, but if your liabilities or your debts are way bigger than your assets, you’re in trouble, my friend. You’re in trouble. The balance sheet is what keeps you in check.

You can’t just keep winging it and praying that client payments will show up in your account before rent is due. The balance sheet will show you where you really stand and knowing your true worth, financially speaking of course, is empowering. All right, let’s talk the one thing every business needs, cashflow.

The cash flow statement tells you exactly how much cash is coming in and going out of your business over a certain period. I call this one the, do I have enough to pay myself report? Because seriously, what’s the point of running a business if you can’t pay yourself right? You might be booking clients left and right, but if your money is all tied up in expenses, you could still find yourself cash poor.

The cash flow statement shows you how liquid your business is, meaning how easily you can access cash when you need it.

This is especially important for you creative entrepreneurs, because your income can be a bit, let’s just say inconsistent. One month we’re thriving and the next month we’re googling, can I pay rent and exposure? We’ve all been there. But here’s where the cash flow statement saves the day. It helps you anticipate those dry spells and plan ahead so you’re not scrambling to make ends meet when the work slows down.

I want to clarify that usually within your first year that cash flow statement is not going to be as valuable as it would be in comparison to previous years. Because when you’re starting to build a business there are going to be ups and downs but you’re not going to recognize those trends. Because you haven’t been in business long enough.

So let’s get real for a second. These financial reports aren’t just about tracking numbers for fun. They’re telling you the story of your business, where you’ve been, where you’re at, and where you’re heading. Think of them as your business’s diary. But instead of angsty teenage poetry, you’re getting the raw truth about your money.

Here’s the thing. If you’re not reading the story these reports are telling, you’re flying blind. You could be walking straight into a financial disaster and not even know it. And I’m not trying to scare you. But I’ve seen way too many creative entrepreneurs get into trouble because they ignore these reports until it’s too late.

If you’re listening to this and you’re one of those creative entrepreneurs that only touches your financials once a year, And now, it’s October, and you’re panicking because it’s almost time for another tax season? Then you know I’m talking to you. This is one of those moments where you need to buckle down and really get in there and look at them.

Again, I’m not trying to scare you, but these reports in the stories they tell are so vital to your business’s success that if you ignore them, it’s going to harm you in the long run. You have to know your numbers. You just have to.

Why? Because those numbers are going to tell you where the leaky faucets are, where your opportunities for growth are, and whether you’re headed in the right direction. Imagine selling a service or a product and never making a profit from it, but continuing to sell it anyways. Now, you’re not going anywhere.

You’re just treading water. It’s like driving a car without looking at the gas gauge. Yeah, you might feel like you’re fine, but one day you’re going to be stranded on the side of the road because you didn’t pay attention to that little warning light. Here’s where things get serious. If you want to grow your business, you need to be looking at these reports.

Every. Single. Month. Yup. Monthly. Not whenever you feel like it. Not when tax season hits. Every. Single. Month. And I know you’re thinking, ugh, Samantha, I barely have time to eat lunch most days, and now you’re asking me to check financial reports every month?

But listen. This is one of those small habits that can literally make or break your business. I’m not being dramatic. The difference between businesses that grow and businesses that struggle is how closely they’re watching their financials. It can seem like it’s a lot of work. Trust me, I, some days I hardly have time for lunch.

But what I’ve learned is that making time for the things that are important in our business is how we grow and thrive. Here’s how to turn this into a habit. Pick a date each month. You can call it Money Monday or Financial Friday. I don’t really care what you call it. Let’s just do it. Look at your P& L, your balance sheet, and cash flow statements.

Review them like you would a juicy novel. Where’s the plot twist this month? Are you making money? Did you spend half of your income on coffee? Where are you winning? And where are you definitely not? Take action. Use this data to guide your decisions for the next month. Maybe that extra software subscription isn’t worth it.

Or you need to focus on promoting your most profitable offer more aggressively. The bottom line is this. Your business is either growing or it’s dying. And these financial reports are the compass that keeps you moving in the right direction. Ignoring them? That’s like deciding to ignore a compass in the middle of the forest.

Not a great plan unless you enjoy being lost. If you take the time, just once a month, to really dive into these reports, you’re not just surviving, you’re setting yourself up to thrive. The decisions you make with this information can be the difference between scraping by and hitting those major business goals you’ve been dreaming about.

Your financial reports are like having a direct line about your business. They tell you if you’re on track or if it’s time to pump the brakes and course correct. They reveal opportunities you didn’t see before and show you where you’re throwing money down the drain. And most importantly, they give you the power to act, to pivot, and to build the business you’ve always wanted.

One that’s both creatively fulfilling and profitable. Okay, let’s bring it all together. Monthly check ins with your financial reports are non negotiable. Your P& L balance sheet and cash flow statements are the core three you need to review. These reports not only tell you the story of your business, but if you’re not reading that story, you’re missing out on key insights that could make or break your financial success.

Monthly So here’s your action plan. Make a date with your financial reports. Seriously, put it on your calendar like any other important business task. Set a reminder, grab your favorite drink, whether it’s coffee, a little bit of wine, a little bit of water, whatever it is, and take a good hard look at those numbers.

You can’t grow what you don’t measure, folks. And if it still feels overwhelming or you’re thinking, Samantha, I don’t even know where to get started with this stuff, Don’t worry. That’s exactly why I’m here. Whether you need help getting organized or just a little nudge in the right direction, you know where to find me.

📍 All right, listeners, that’s a wrap up for today’s episode of Creative Minds Smart Money. Financial reports don’t have to be scary, and they sure as heck aren’t boring when you know what to do with them. If you found today’s episode helpful, go ahead and hit that subscribe button, share this episode with your fellow creatives, and let’s get you one step closer to financial freedom.

Remember, your numbers are your business’s story, so make sure you’re reading them monthly and making those smart, strategic moves. You’ve got this. Until next time, farewell fellow travelers.