Nov. 3, 2025

Vital 5

Vital 5

There are 5 numbers that should always be top of mind if you are a business owner.  Know these numbers by heart at all times and you will be able to make 75% of all business decisions.

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Hi, you love them too. The sensuow for you you.

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This is the Pipemin here on the Adventures pipe Man

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W four c Y Radio with our Positively Pipemin segment

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with Michael Barbarita. He is amazing with some powerful business strategies,

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so let's bring him on to talk about them.

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Well, thank you for having me again, Deane.

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You know today I wanted to talk about Uh well,

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let me say this. Business owners hate the numbers. They

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can't stand looking they can't stand looking it financial statements.

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They can't They don't understand them, they get blurred vision.

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They don't want to deal with them. So when I

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when I've done is I've tried to make it easier

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where if you just know five numbers I call it

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the vital five, that you'll be able to make about

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sixty to seventy five percent of your daily business decisions

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and with much more accuracy and instead of winging it.

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And you know you still have to understand the story

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that your financial statements are telling you, and you should

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hire someone to.

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Help you do that.

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If you if you get blood vision looking at financials,

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but if you at least have a hold on these

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five numbers, then on a and by the way, on

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a weekly basis. One of them on a daily basis.

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I'll get to that.

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Then you're going to be able to make better business

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decisions and it's going to help you answer you know,

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run around seventy seventy five percent of of your decisions

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in a day. So let me go through those. And

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like I said, you know, these are just five number

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is that your bookkeeper has to give you or somebody

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or you have to get them yourself, and you should

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get them on a weekly basis, with one being on

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a daily basis. So they are you should know what

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your weekly sales are. You should know what your weekly

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gross profit is on those sales. You should know what

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your weekly gross profit percent is. That's three. You should

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know what your net profit is for that week, and

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you should know your current cash balance on a daily basis.

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And if you know those five numbers, you'll be able

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to make better business decisions. And by the way, the

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most important number out of all those five is two. Actually,

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if you know your cash and your gross profit percentage,

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that will help you tremendously. Uh So I just narrowed

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it down to two, but I'd prefer you to know five,

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But I know, I know everybody's scared about more than you.

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Know more than one.

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If you know these five numbers, four on a weekly basis,

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one of them on a daily basis, you'll make much

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better business decisions, and you'll be making decisions based on

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the numbers, not winging it, which is what happens today

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with most business owners relative to relative to their business decisions.

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Can you tell me why each one of these five

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is important to them making good business decisions?

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Okay, so you have to within a week, you have

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to know what your sales were, because there will be

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decisions on who to pay, what not to pay, and

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that type of thing. And by knowing what your sales

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out this week, unless your business is cash on delivery

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or something of that nature, you'll be able to understand

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what you can pay, what you can't pay. And also

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you'll be able to make decisions like that when you

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know what those When you know what your sales are

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and assuming for a second that you're comfortable with the

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number meaning not a not a bad week, you know,

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not if the sales activity wasn't that bad at all,

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it was a pretty decent week, you'll be making you'll

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be able to make decisions regarding payroll, regarding scheduling, uh uh,

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regarding ordering, whether it's ordering from vendors or just in

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general ordering products and services. So you'll be able to

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make better decisions by knowing your sales, by knowing your

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gross profit and your gross profit percent. Those are kind

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of uh in unison.

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Uh.

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You'll be able to make decisions uh centered around uh

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whether or not you should do a job or do

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do a particular profit, work with a particular customer, okay,

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because you'll get an idea right off the bad whether

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you're whether you're in the trades or whether you're just

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in business in general, you'll get a good idea whether

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or not that customer is worth wor work with.

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If you know your profit, go ahead.

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And you brought up a big point there that I

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experience too, as we all do, and that is you

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think you're making enough profit, but it does depend on

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the client sometimes because some clients need a lot more

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handholding than others, and that eats into the profit.

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Right, and you have to understand what your gross profit

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is on a consistent basis in order to make that

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decision correctly.

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So that's just another example, and.

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I'll give one quick example that happened recently to me.

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Although I rarely use PayPal as a form of payment method,

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why because their merchant fees are twice what my merchant

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account is. And everybody uses it because it's easy. But

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it's easy, but you're paying twice as much. So I

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had a client that you know, wanted it via PayPal,

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and not because of PayPal, not because that's their form

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of payment. It's because they wanted a quote unquote PayPal invoice.

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And so basically, in order to make that client happy,

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I needed to do it by PayPal. I needed to

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get charged twice as much. And so now that part

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is not figured in your profit margin, So you may

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have to figure it in your profit margin for specific clients.

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Exactly. Got a good point. Yeah, no question about that.

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And you know that's that's the thing about. If you

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don't know the numbers you're gonna wig it. Well, I

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might be able to get away with working with this client,

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but you don't know, you know, you don't you don't

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know your number that you have to hit, and therefore

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you don't know if that's going to be You don't

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know if that particular engagement is going to be profitable

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or not. So it's it's really important that just have

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a handle on these five numbers. And when I go

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to net profit, I need I need you to understand

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if you're making money this week or not. I need

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to understand on a weekly basis whether or not you're

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making money. I think you have to know that now.

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First of all, if you are making money, it helps

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you sleep at night. If you're not making money, then

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you have to make decisions associated with how do I

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stop making money?

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You know, making money? Sorry, I was just saying I

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think money. Making money is kind of important.

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Yeah, it's a little bit.

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You know, you have a T shirt that says you

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don't scare me, but I think if you're losing money,

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you might get a little scared.

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So well, and you know, I'm glad you use this

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in your interview here. But the rest of it says,

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I have three daughters.

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I see, I get.

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It, which my daughter's why my daughter's got it for me.

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But true, it is true. It worked out well because, yeah,

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if you're not looking at the numbers, you better be

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scared because you're going to wake up one day at

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the end of the year and realize that you thought

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you had a good year, and you really had a

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terrible year because too many business owners base how successful

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their business is on revenue, right, and revenue doesn't make

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you successful because if you experience a loss of instead

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of a profit, it doesn't matter if you have ten

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billion dollars in revenue. If you're spending twenty billion, you're

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not doing too well, right and and.

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Well, that's the reason.

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You just have to have a handle of way your

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business is at any point in time so that you

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can make better, high quality decisions. And you'll see it.

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You'll see you'll see it. You'll blow off that customer

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that's not worth it, or or you'll pay You'll pay

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for something because you know you have the cash, which

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is the next thing. You'll pay for something because you

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know they they will improve the value of your business

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or increase uh increase the you know, the the profitability

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of your business because.

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You know you can afford it, right.

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I mean, it's it's just having a handle on it

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instead of just guessing. I see I see it time

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and time again where business owners are just simply guessing

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their way through decisions when there's actual data that's hidden

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in their business.

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It's actually not hidden.

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It's pretty it's pretty uh visible, but this data is

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there and they're not using it. And all I'm asking,

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and I know it's a big ask, but all I'm

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asking is is just understand these five numbers and you'll

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be and you'll be three quarters of the way there.

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You still have to understand the story of financial statements

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of telling you and if you need help with that,

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go get.

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That help because it's it's really critical.

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But at least you have the baseline information if you

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if you really understand those five numbers.

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So how do people find out more information from you?

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And maybe you can help them in this department to

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make it easier.

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Well, what I like to what I like to do, Dean,

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is I like to do book interviews. So I like

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to interview people for the next edition of my book

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because business is always changing and I'm always interested in

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uh business owner's reaction to my strategies, whether it's good

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or bad. And so what I'd like to do is

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interview business owners. And if you'd like to interview, you

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go to NeXTSTEP CFO dot net forward slash contact, fill

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out the contact form and in the message box type

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the word book interview and then will I'll arrange to

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get a calendar link over to you so that you

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could schedule the book interview. And you know, and the

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thing is is what I do. The booking is pretty easy.

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It's sixty minutes on zoom and then I uh present

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strategies from my book and then I ask you to

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comment on whether or not the strategy would work or

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what the impact would be of that strategy if someone

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was to implement it in your industry, and then I

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documented for the book.

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And that's it. And I promise whoever.

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Who wants to do a book interview, I promise you'll

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learn business strategies or competition isn't doing.

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There you go.

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And that's important because there's so many competitors that are

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doing the exact same thing. The only way you're going

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to stand out is to do something.

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Better, right, and everybody's call. And that's why everybody gets

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frustrated when when people look for a lower price somewhere else,

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because that's the only differentiation that a business owner is

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giving a prospect is priced. That's the only place they

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get defall to because they're not showing how they're different.

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Yeah, better exactly. Well, once again, you're a wealth of

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knowledge and that this was actually really really helpful for

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people because you are absolutely correct. Most business owners they

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don't want they think ignorance is bliss, so they don't

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want the numbers, but right, and they're.

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Scared of them. Yeah, like almost like the T shirt that.

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I I'm scared I really know how much I'm really

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making because I think I'm doing a lot better. That's

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usually what it is, though. You know, you have that

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revenue stuff in your head and you're like, WHOA, I

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just did a million dollars, right, and that feels good.

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Doesn't feel good if you look at the numbers and

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find out you spend a million and one dollars. That's

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right there, It is all right. Well, we'll see you

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again next week here on the Adventures pipe Man positively

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Pipeman segment with more powerful business strategies from you the expert,

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Michael Barbarian.

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Thank you, Dave great, thank you for listening to the

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Adventures of Pipemin on w for CUI Radio.