Show your numbers–Just not to everyone

Hello there ?? Thanks for stopping by! Reality Check shares information that furthers visionary prowess, the ability to map and navigate the shifting path toward the world you believe should exist. It provides actionable insights that close the gap between ideas and impactful execution.

If you’re new to our community and would like to be a part of this discussion, click the “subscribe” button above…

Last month, in the first of our series on knowing, showing, and growing your numbers, we talked about how knowing your numbers gives you data, setting you up to make better decisions for your business in three common scenarios: the not-yet-started startup, the funded-but struggling business, and the high-growth enterprise.

This month, we’re focusing on showing your numbers in the same three scenarios. If knowing your numbers gives you data, power, and knowledge, showing your numbers helps you leverage that data - and others’ perspectives on it - to make the right choices for your business.?

By showing your numbers, we don't mean posting your monthly revenue on LinkedIn. We mean creating a habit and a practice around sharing the financial health of your business on a regular basis with a select and small group of people you trust. Each member of this group has different perspectives and experiences, which help you see the bigger picture. This helps you make confident decisions sooner–before you get into a situation where you feel so financially pinched that you have no options.?

The benefit of showing your numbers is twofold:

One, you improve your entrepreneurial skills and build resilience to weather the highs and lows. You know the roller coaster of entrepreneurship - one day, you have a great client conversation and feel like the business is thriving and everything is right with the world. But the next day, you lose a deal, can’t deliver on time, or maybe even lose a client, and it feels like things are falling apart. Neither one of these is 100% true. Your emotions aren’t a solid guide to the health of your business, but data is.?

Showing your numbers pushes you to get better at identifying and sharing what's really happening in your business, based on data.?

Two, as the principal investor and business leader, you owe it to yourself and to everybody working with you - whether they're a salaried team, vendors, or funders - to communicate the true financial situation of your business and have difficult conversations, if necessary. Knowing the numbers in your business and being comfortable talking about them not only helps you make better decisions but also helps you build stronger partnerships as you grow.

Showing your numbers means something different depending on the growth stage of your business.?

The not-yet-started startup: Showing your numbers to gain clarity.

You’re in the ideation phase of your business and don't have a product yet, so showing your numbers likely means sitting down with your family or friends and saying: I'm going to start a business, and here's what I think the next 12 to 24 months will look like - for both the business and for me (or us) personally.

Even if you don’t expect to quit your job right away, you want to discuss your plans with the people in your life who will be affected, as well as people who can help you make informed decisions.?

This conversation is also an opportunity for the people closest to you to help you find what you need to get started: resources, suppliers, clients, and potential obstacles on the path to profitability. Showing your numbers–early on to your inner circle–is a way to prove your concept and feel more confident that you’re making a rational decision.?

The started-but-struggling business: should you continue, and how?

Trust the numbers to tell you.?

Maybe you're in that messy middle situation; you're concerned you don't have enough cash to continue, and you don't see how this will all work out. Eighteen months ago, you were optimistic and ideating, and you got a bunch of people in your circle to support the start of your business.?

But your 18-month plan didn't quite work out, your bank balance is dwindling and you’re wondering what to do next.?

If you know your numbers up to this point, you’ve already got a pretty good idea of where you stand. But you only have your own perspective about why, so showing your numbers to the people who have already supported you is a great way to see other options.

Let’s say that you talk regularly to your inner circle about your finances. In one of your meetings, they might notice that you previously said costs would come down when you reached 100 clients, but you’ve met that goal, and costs have stayed the same. This leads you to double-check your vendors and see you’re not getting the price break you and the vendor agreed upon. Rectifying this mistake with the vendor can immediately generate some more cash for your business.

Talking things through with someone who’s been around for a while gives you distance and a perspective that helps you proactively identify areas where you can improve your situation.

But this may be a situation that doesn’t have a quick fix. If things are not going well and you think you may need to reduce staff or reduce or potentially even close your business, it’s past time to share your numbers with an expert in finances, like your accountant or a fractional CFO, who can help you see if there is a viable path forward. This financial professional's input is imperative to making solid, informed decisions about what to do next.?

You have to be willing to show your numbers and speak honestly about what's really happening in your business.?

If you're at the point where you're juggling creditors and figuring out which bill to pay and how you’re going to make payroll, there's not a lot that any expert or funding source can do for you.?

However, if you are three (and preferably six) months ahead of that point and you see client onboarding is slower than you predicted, or sales are not as strong, or you’re not sure how to control costs, reaching out to that trusted financial expert, can help you understand what would have to change to right the ship.

Showing your numbers is an integral part of building your practice of planning. There’s the tactical part of having the conversation and the personal part of forming the habit and practice of showing your numbers to people. Like any practice, the more you do it, the better you get at it. Normalizing the numbers conversation can boost your skills as well as your confidence.

Once talking about money becomes a habit, you reduce the emotional charge and potential embarrassment - even when the numbers aren’t what you wanted.?

Talking about money is already hard. When things get tense because you feel like there is not enough money, and you feel responsible for that, it gets even harder. But your ability to have that conversation can make (or break) your business. Cultivating the practice of showing your numbers lessens the discomfort and strengthens the muscle of talking about money so you can handle difficult financial times.

It’s also very hard to try and find that trusted someone to talk to when you're already in a difficult situation. It's far better to cultivate that group of people who can give you outside perspective–before you need them.

The business in rapid-growth mode: It’s still messy.

You’re past the messy middle, but things may not feel less messy. As a business in the hyper-growth stage, you've got a lot of new clients coming on who create significant additional expenses, so you may still be cash-strapped.?

The difference is you're cash-strapped because things worked too well.?

What everyone else sees is you signing that big client, but you’re wondering how you’re going to pay for it. You’re not saying that out loud, so you need people you can talk to about your numbers, because in every business, no matter how well you plan, no matter what tools you use, cash will be a problem at some point in your growth.?

Just like in the other stages, you need a trusted circle as well as a financial expert with whom you can be open about your numbers.?

This practice will help you know what’s going on in your company financially, so you can see the obstacles coming instead of running into them full speed.

Showing your numbers to this group will help you practice the cash conversation so you’re ready to talk to debt facilities, banks, or revenue-based financing companies; or equity investors like angel investors and venture capitalists. The more you talk about your numbers, the more comfortable and better at it you get, and you will have practiced this conversation, many times, before you approach someone who might fund your business.?

Do not wait until you’re in trouble to get your trusted group together.?

Create your circle of trust in the early stages of your business. If you haven’t already, start now, right where you are.?

It’s important to know who to share your numbers with because it shouldn’t just be anybody and everybody.?

There are three concentric circles that represent the groups to whom you’ll show your numbers.

Inner circle:?

This is your foundational group, choose the friends and family who care about you and who will also tell you the truth. You share everything with your inner circle, they help you see things more clearly and make smart decisions for the business. This group should also include a trusted financial advisor or expert, CPA, accountant, or other professional, who is not a friend or family member.?

Middle circle:?

These are people who are impacted by your decisions: company leaders and employees. This group is different from your inner circle in terms of how much you share. You need to? decide what you will disclose to this group. You shouldn’t be comfortable showing your numbers to this group unless you’ve shown them to your inner circle first.?

Outer circle:?

These are the people who might give you money to grow. In order to talk to this circle of people, you must have practiced with both your inner circle and your middle circle so that you are comfortable speaking in this arena and can share exactly what you want to share in a way that is polished and experienced.?

If knowing your numbers is a personal practice, showing your numbers is both a personal and external one that strengthens your prowess as an entrepreneur and business owner.?

Showing your numbers gives you perspective and confidence that you can use to make better decisions. It gives you options, when things don't work out the way you thought. It helps you?make better decisions earlier, which gives you flexibility, control, and the opportunity to realize the vast potential in?your business.?

Stephanie Sims is a recovering investment banker, two-time founder, speaker, venture capitalist, and startup educator who believes every entrepreneur should build a business that makes dollars...and sense. She is also the author of Funding Your Business Without Selling Your Soul. After watching too many promising founders chase funding at the expense of long-term success, she created Fric IO —an interactive platform that turns your big vision into actionable steps. Fric helps entrepreneurs like you map and navigate the shifting path toward the world you believe should exist. This skill, which Fric calls visionary prowess, equips you to make confident decisions, take committed action, and chart your own route to success.