Running a creative business means balancing your artistic passion with the practicalities of managing a company. For many creatives, tracking finances feels overwhelming or just plain boring. But here’s the thing: understanding a few essential numbers can help you make smarter decisions, ensure your business's stability, and set you up for long-term success.

Numbers aren’t just about crunching data – they’re insights into how your business is really doing. Without keeping track of key financial metrics, you risk being caught off-guard by cash flow issues, losing sight of profitability, or missing growth opportunities.

Imagine launching a new service or product and having no idea how it’s performing; if you don’t know your revenue or track your expenses, you’re left guessing.

In this post, we’ll make the process manageable by breaking down the three most crucial business numbers you need to know: monthly sales revenue, expenses, and profit. Let’s make numbers work for you, not against you!

minimal wooden desk - business numbers you need to know

1. Monthly Sales Revenue

What Is Monthly Sales Revenue?

Monthly sales revenue is the total amount of money your business earns from selling products or services within a month. For creative solopreneurs, this might include income from client projects, product sales, workshops, or even passive income sources like digital downloads.

Why Track Revenue?

Tracking revenue gives you insight into how your business performs on a monthly basis. If you’ve ever wondered why your bank balance fluctuates wildly, this is your answer. Knowing your monthly revenue helps you spot patterns, identify high-earning months, and see where your cash flow might dip. This understanding is critical for managing income, planning for future investments, and ensuring you can cover your expenses.

Example: Imagine you’re a photographer, and your revenue spikes in the summer wedding season, but dips in the winter. By tracking revenue month by month, you’ll see this pattern emerge and can prepare for those quieter months by saving from your high-revenue months or finding other income streams to support you during slower times.

Tracking Revenue Effectively

There are plenty of digital tools to make this easier. Many business owners use platforms like QuickBooks, FreshBooks, or Wave, which allow you to create customized sales reports, analyze revenue over time, and even generate year-over-year growth comparisons.

For simpler tracking, you could use a Google Sheet to input monthly revenue and track fluctuations. The goal is to find a system that you’ll use consistently – even if that means starting with something basic.

For more ideas on setting up a financial tracking system, check out these 6 Virtual Bookkeeping Tools to Simplify Your Small Business

2. Business Expenses

Understanding Expenses

Expenses are the costs incurred in running your business. For creative business owners, expenses typically include everything from website hosting fees, software subscriptions, supplies, and equipment to marketing costs and outsourcing. Expenses are generally broken down into two types: recurring and one-time.

Recurring Expenses: These are costs you pay on a regular basis, like software subscriptions, rent, or materials. They’re usually predictable and can be budgeted for more easily.

One-Time Purchases: These are less frequent, higher-cost items, such as a new camera for a photographer or a computer for a graphic designer.

Why It’s Important to Track Expenses Regularly

Knowing your expenses is crucial because it keeps you from overspending and allows you to see where your money goes each month. By monitoring expenses, you’re also more likely to identify unnecessary spending. Plus, expenses reduce your taxable income, so tracking them carefully can help you maximize tax deductions.

Tracking Expenses Effectively

Receipt management can feel like a chore, but it’s key to understanding your spending habits. Keep digital copies of receipts in a dedicated Google Drive or Dropbox folder, or use an expense-tracking app to scan and store receipts. QuickBooks and Expensify are popular options, with features for categorizing and storing expenses.

Example: Say you run a design studio and find that you’re spending a lot on art supplies each month. By reviewing your expenses, you might notice an opportunity to save money by buying certain items in bulk or only replenishing stock when necessary. Over time, this approach can save you hundreds of dollars annually.

Budgeting helps you allocate a certain amount each month towards your fixed expenses and leaves room for larger purchases. For instance, if you plan to attend a creative conference in six months, setting aside money now will prevent stress later.

3. Business Profit

What is Profit?

Profit is what’s left after you’ve subtracted expenses from your revenue. It’s the amount of money you actually get to keep to invest back into your business and pay yourself. Understanding your profit is crucial because, without it, you’re running a hobby, not a business.

There are two types of business profit:

Gross Profit: Revenue minus the direct costs of producing your product or service (e.g., materials or outsourced work).
Net Profit: Revenue minus all expenses, giving you a true view of what your business takes home.

Why it’s Important to Understand Profit Margins

Knowing your profit margin is the first step toward knowing if your business is sustainable. Tracking profit can help you make informed decisions, like adjusting your pricing, scaling your operations, or even hiring additional help.

Example: Suppose you’re a freelance writer with a regular income, but after tallying expenses, you discover your net profit is less than expected. Maybe a new software subscription or recurring marketing expense has eaten into your profit. Seeing this clearly allows you to adjust either by increasing rates, reducing expenses, or finding alternative tools that are more budget-friendly.

Calculating and Tracking Profit

To keep it simple, start with a monthly profit calculation. Subtract your expenses from revenue, and that’s your profit. This is easy to track in Google Sheets, or if you’re using accounting software, it can generate a report for you.
Once you have a few months of data, take a look at your profit margin. This is calculated as (Net Profit / Revenue) x 100. If your profit margin is low, it might be time to reduce costs or reevaluate pricing.

Common Challenges

The biggest challenges in tracking these numbers include inconsistent tracking, mixing personal and business finances, and categorizing expenses correctly. Many business owners also struggle with cash flow issues due to delayed data entry or a lack of regular reviews.

Example: If you’ve ever been surprised by a low bank balance, it might be because of irregular tracking. Sticking to a system – whether it’s weekly or monthly – ensures you’re never caught off guard.

How to Use Your Numbers for Business Growth

Tracking these three business numbers opens the door to strategic planning. For instance, reviewing your expenses might reveal that you could save money by switching suppliers. Or, spotting a consistent rise in revenue could mean it’s time to invest in new marketing strategies.

Consider setting aside time weekly, monthly, or quarterly to analyze these numbers and make data-driven decisions. As your revenue grows, you may want to adjust your budget or increase your profit goal.

By understanding your numbers, you can confidently plan for expansion, whether that means upgrading your tools, hiring a team member, or investing in advertising.

Next Steps

Start small – choose one area to track this month. Commit to regular reviews, and don’t hesitate to seek professional support if numbers aren’t your thing. Tracking revenue, expenses, and profit will give you the clarity you need to grow sustainably.

Let these numbers guide you, so you can focus on what you love: your creative work.

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3 Numbers Every Creative Business Owner Needs to Know