What Your 2025 Numbers Are Really Telling You (And Why It Matters for 2026)

Welcome to the Creative Mind Smart Money Podcast where we turn financial confusion into creative confidence. I'm Samantha Eck, the keeper and fractional CFO for creative entrepreneurs. Each week I'm sharing my financial expertise and actionable strategies to help you build a thriving creative business. Plus, you'll hear from industry experts who bring fresh perspectives on growing your business beyond the numbers. As building a successful creative business starts with strong financial foundations, your next chapter starts now. Your listening to the Creative Mind's Smart Money Podcast and continuing on our year-end wrap-up series on this podcast, we're talking about our 2025 numbers and what they mean. So after wrapping up your books, reconciling everything and a giant stack of reports, which I talked about we go deeper into, we want to understand what these reports are really saying about our business. We don't just want to look at the reports and say, great, you know, what do we need these for? We're just going to file them away. We don't want to be the type of person that PanEx does their books at the end of the year and then just sends it off to their CPN says, I'm ready to go. You actually want to use the data to understand the story that your business is trying to tell you. So as I've heard, we say that a million and one times the story of your business is trying to tell you the story of your business. I don't know how many times I can repeat the fact that your business is trying to tell you a story. There's no ifsands or buts about it. There is a story that is unfolding within your business and it wants to tell you that story and you have to look at the reports to understand it. So this episode isn't about just looking at data for the sake of data. We want to look at 2025 financially on a month by month, on a year of a year, as a whole, on a quarter of a quarter, whatever it is, to really discover all of the little secrets that are hidden within our numbers. We're not looking for perfection and we're not just saying, oh, look, I hit, you know, the revenue goal. That's not what we're doing. We're looking at the overall deeper story so that we can determine what we need to do in 2026 to make our numbers look even better. Similar to the last episode, we have some steps. So the first one that we're going to do is look at our business on a month of our month basis. So within your accounting software, whether that's your old QuickBooks, whatever it is, you should be able to pull reports on a month by month basis. So it'll be like a profit and loss by month or something like that that you can pull. And look and see the differences between the month. And don't just pull like, January, February, March, April, you want to pull them like the whole year month by month. Then look at everything and look at your revenue and expense and the, but also look at each individual category to like understand what's going on. So for example, if you're looking at the meals category, let's just say one month, you had $200 in meals the next month, you had $4,000 in meals. That's a good indicator to be like, the fricap in there and understanding just what happened. If you're like, oh, yeah, we had a big corporate party event that we threw whatever, you know, I know a smaller creative businesses usually were not doing that, but maybe you did. Maybe it was a one off maybe opened up your photography studio to the public and you threw a big party or something like that. Just having that data, understand K, what went on throughout the month. You just want to make sure that you're looking at all of it. You want to look at the natural highs and lows where they predictable or random, you know, you saw a dip in June. Was that also a dip in June of last year? Obviously, you're not looking at this on a month of a month, but you're on a year over your basis, but just ask yourself, was there usually a dip around this time last year and like making sure that if it was predictable, okay, so now I need to plan ahead for that. Maybe again, maybe every June, your sales dip because your clients are taking time off. Maybe they don't, their kids are off school or taking a vacation and then September all of spikes because kids are back in school. Everybody's kind of coming back looking for website design services or looking for photography, whatever it is. Looking at everything on a month of a month basis is really going to show you where the heartbeat of your business is because it's going to show you the timing patterns where you had some cash flow crunches. So when you see like those negative months and where you kind of really grew because you're going to see, okay, maybe I hit 20,000 this month, the next month, I had 30,000, then I hit 40,000, but then I went back down to 30,000 because, you know, we had that low, whatever it is, it's just going to show you that rhythm, right? It's going to really give you that insight into the rhythm of your business. Then we want to look at things on a quarter over quarter basis. This is our momentum check. Because now we're moving into a bigger chunk, we want to look at how each quarter performed against the last. So how did Q1 compared to Q2? Again, this is going to give you that pattern data because you're going to see, okay, Q1, this year was slower than Q1 last year. And of course, you want to kind of look at those things as well. So yes, we need to look at a big, you know, the month of a month data, but we also want to compare that month of a month data to the previous year, it's month of a month data. Same thing with a quarter over quarter data. We want to prepare this year's quarter data with last year's quarter data. And just really look at the trajectory, like how do we grow this quarter versus last quarter? How do we grow this year versus last year? You know, and of course, sustained progress is not just hitting a strong quarter. It's having that consistent quarter. So if you're making $30,000 of a quarter and you're consistently seeing that even though, you know, monthly fluctuates, that's how you know that you're having that consistency. And you have sustained progress, even if you're not seeing it on a monthly basis, you're seeing it quarterly, right? And that's still a win. So did your profit trend upwards as your revenue grow or did it flatten because your expenses kind of expanded as your revenue grow? And then we want to look at everything on a year over year basis. So compare 2025 to 2024 and maybe even 2023 if you would like. You know, again, looking and seeing if our revenue grew, how much did our revenue grew from last year to this year? Did our profit grow or did we have a lot of costs that came up with it? So we lost a lot of that what we could have retained or did our costs stayed down? And that cost, I mean, like your expenses, your costs of goods. And did you pay yourself more this year? So again, when we're looking at our balance sheet and our profit loss, just analyzing to see if we paid ourself more this year because the two reports again that you're going to want to look at at this detailed level is your balance sheet and your profit loss. Those are your two most important parts, okay? And I want to just remind you that you can see if the profitability is good or if it's just noise, you know what I mean? Like if you're seeing that you did make more profit, but maybe you were looking at that and you're saying, wow, I really hated a lot of the projects that I did last year or this project didn't really make sense to my business. You can kind of analyze that and say, okay, well, I made more money, but I didn't like the way I made more money. It gives you that strategy, right? And we're going to talk more about the strategy behind some of these numbers in a coming episode. But again, we want to, this is how we're looking at things and we want to really analyze it. Okay? Once we've kind of gotten through the year over year, we looked at things month over month, quarter over quarter year over year. We now want to remove the comparison, remove the comparison of last year of 2024 and 23 and look at the whole year. It's a big picture. So look at everything. Don't just just pull a year to date numbers for 2025 and just look at it as a single body of work. So your total revenue, your total expenses, your total profit, your total owners pay and just look at what you were expecting. So let's say you said a gold beginning of the year, okay, I'm a business owner. I want to make $250,000 by the end of the year. Look at that. Did you make it? Did you hit it? I only want to spend 50, you know, 60, $70,000 on expenses. Did you hit that? I want to retain the rest of it as profit. Did you hit that? I want to pay myself $60,000. Did you hit that? Looking at all of those numbers and understanding to see if you actually did hit it. Looking at what the relationship was between each of these numbers, you know, how much of what you actually earned the revenue that you brought in turned into profit. What was that ratio and understanding that how much of the profit that you had was owners pay versus stayed in the business for the investment. Maybe you were saving up for a bigger project. And then of course analyzing and saying if you're spending a line with your priorities or did that money drift towards what we like to call you shiny penny projects. So did you buy a new software? Did you upgrade your website just because you wanted to, even though you did it last year? Like what did you do? Did it did it align with what you wanted? Okay. Every dollar you earn this year was 100%. How did you divide it up by percentages? So how much of that percent went to your cost of goods if you have sort of products or even maybe you're doing a business or a service-based business for your cost. You have cost of goods. How much of it went towards your operating expenses? Towards taxes, towards savings, towards yourself. It's a very important question. Again, this is kind of getting a little bit into the strategy which we're going to dive deeper into later because the whole year is going to help us to see the theme, right? Obviously looking at a month of her month quarter of a quarter year. year we're looking for those fluctuations, we're looking for those patterns, looking at everything on a whole year basis. This is where we're kind of getting to that reflection. We want to just analyze if it was a year of investing, was it a year of consolidating, was it a year of expanding, was it a year of kind of paying ourselves more? Did our business feel financially healthy or do we just constantly react to whatever was going on? So we want to really look at that to understand that. Now that we've looked at everything on those different basis, we want to combine the data and ask ourselves what were the best and worst months? Okay. What caused them? Was it a new client? Was it a new launch? Was it maybe you had burnout? Maybe there was something in your life that happened, maybe someone passed away. Maybe the industry shifted. What caused your best and worst months? Because this is going to help you. This is an intentional reflection. We want to reflect. We want to look for the repeating patterns versus the one-offs. So if you see like a really high expense just in August, but nowhere else, maybe let's say again, using the meals in example, maybe you opened up your studio to have people come in, things happened and you saw that it was a one-time flick. That is not a pattern. So don't acknowledge it as a pattern. It was a one-time thing you know what's going on. Use it. If you know when you have a dip, you can plan your cash flow and your marketing around that dip to hopefully mitigate it, right? Understanding that will just give you information. Once you've seen all of these different views, it's going to help you connect to certain decisions you need to make. For pricing, did your numbers support the rates that you want to see? For spending, did your investments pay off? If you haven't already, there is an episode I did earlier this year, where it was reflection on your investments, looking at your investments and ensuring that they paid off, you know, and doing a proper investment reflection. And then growth, did you see your profit margins full study or did they shrink? You can't fix what's in your business if you can't see it and you can't repeat what you don't see or recognize. You know what I mean? So if you're not looking at the patterns, if you're not seeing them, you can't make any changes. You can't understand it, which is why I tell you that there's a story, right? This is where your numbers move from being sort of that reactiveness to just being at the end of the year and tossing it at your CPA to be more strategic. Okay? Of course, we're going to go more of this when I do the strategy episode that I'm going to give you at the end of the year, but I want you to pick one area to focus on. So whether that's increasing your profit margins, stabilizing your cash flow, raising your own estate or reducing that spend creep, just track that next year. Keep that in mind as your goal. That is the area that you want to focus on, so we're going to make that our goal. Again, your numbers aren't a judgment call, okay? They're there to guide you. So we want to make sure that we learn from the data that our numbers are showing us. They don't lie, but they also don't speak unless you listen to them unless you actually look at them. As always, if you found this episode helpful, make sure to leave a review, like it, subscribe, comment, share it on social media so that other people can find it. And if you want to hear more topics like this, shoot me a message. Let me know what you want to hear on the podcast. I want to know what you guys are looking forward to in 2026. Otherwise, as always, it will be the best week ever. We'll see you next week. Farewell, fellow travelers.