Three reports, four decisions, zero guessing

Stop opening reports backwards

Most owners pull up a report, stare, wait for something to jump out, and close it. The fix is to flip the order: start with the question, then open the report that answers it. There are only three reports, and each answers exactly one question.

• Profit & Loss: did I make money over this stretch of time?
• Balance sheet: what do I own and owe, right now?
• Cash flow statement: where did the money actually go?

The questions, answered

“Should I hire?” — P&L, gross margin line. Revenue minus direct job costs (wages, fuel, materials), divided by revenue. Thin margin + new labor = underwater fast; healthy margin + turned-away work = the hire pays for itself.

“Can I afford that machine?” — balance sheet first (what do you already owe against what you own?), then the cash flow statement opened to your slowest three months. If the payment wouldn’t have cleared in your worst stretch, you can’t afford it — no matter what July’s balance says.

“I’m profitable — where’s the money?” — the gap lives in three places your P&L never shows: invoices not yet paid, loan principal (only interest hits the P&L), and owner draws (they reduce cash, not profit).

“Should I raise prices?” — P&L again, but by service line. Break mowing, installs, irrigation, and cleanups apart and one of two things appears: a “bread-and-butter” service barely breaking even, or a quiet line running double margin. The bottom line hides both.

This week

Write down the one decision on your desk. Open only the report that answers it. Repeat monthly — that’s the whole system. (And if you can’t trust your numbers yet, that’s the real problem — a fixable one.)

Watch the full breakdown

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