Explore the Highlights
What began as a rich conversation on the podcast with Jen Howat sparked something deeper—a realization that many business owners are ready to shift from reactive habits to refined, resilient financial practices. This post expands on that dialogue and brings you behind the scenes of how strategic insight and consistent rhythms can transform the way you lead with your numbers.
Why This Conversation Matters
Entrepreneurs often hear that they should “know their numbers,” but many still operate in a cloud of uncertainty when it comes to their finances. In a recent interview on My Entrepreneurial Life, Jen and I explored why finances and strategy must go hand-in-hand. But our conversation only scratched the surface. This post expands on the themes we touched on—diversifying revenue, understanding profit vs. revenue, and making confident decisions—and offers deeper insight for service-based business owners ready to move beyond financial survival toward long-term stability and elegance in their operations.
Part 1: The Problem with Just Adding Another Offer
Too often, we think of revenue growth in terms of adding. Add another offer. An additional service. Another stream. But addition without intention leads to chaos. The distinction we make at Two Arrows is between an additional offer and a diversified revenue stream.
Additional Offer
An additional offer stays within your existing ecosystem. It’s designed for people who already trust you, and it often addresses the next step in their journey. Think of it as deepening the relationship, not widening your market.
Examples:
- A brand strategist who adds a “VIP Day” or a quarterly strategy review for ongoing clients
- A legal consultant who offers contract reviews as a follow-up to a business formation package
These offers often require minimal marketing because they’re sold to warm leads. That said, they don’t protect you from over-reliance if all your revenue still flows through the same client group or service category.
Diversified Offer
Diversification means stepping into new delivery models, audiences, or market segments. It doesn’t mean reinventing your business—but it does require intention.
Examples:
- A copywriter who adds a digital product or template shop to reach DIY business owners
- A leadership coach who creates a certification program for other coaches
As a result, diversified offers help spread risk. If one revenue stream slows down, another can pick up the slack. The most resilient businesses have multiple strong streams that don’t rely on the same buyer behavior.
Why it matters:
If more than 80% of your revenue comes from one source—whether that’s a client or an offer—you’re walking a tightrope. If that revenue disappears, the entire business structure is at risk. Diversifying gives you options, flexibility, and a stronger foundation for growth.
A healthier benchmark:
Ideally, no single client or offer should account for more than 40–50% of your total revenue. This level of distribution encourages resilience, gives you room to evolve, and prevents any one area of your business from becoming a single point of failure.
A helpful analogy:
I often refer to my earlier experience in dental healthcare when explaining revenue dynamics. Preventive care keeps patients coming through the door and sustains long-term relationships—like recurring income streams in your business. But it’s the diagnosis and treatment—the deeper work—that drives the real profitability and cash flow. The healthiest businesses have both: offers that build trust and volume, and offers that sustain and grow the enterprise.
Bonus Tip:
Run a revenue mix audit twice a year. List all income streams, calculate their percentage of total revenue, and highlight any stream that exceeds 50%—then explore ways to strengthen your secondary streams.
Part 2: Revenue Is Not the Same as Profit
This is a classic but vital reminder. Revenue is the money coming in. Profit is what’s left after the money goes out.
To help clients get clear, we walk them through their Profit & Loss statements with a simple framework:
- Revenue: The top line.
- Cost of Goods or Cost of Services: Everything it takes to deliver the offer.
- Operating Expenses: The systems, tools, labor, and admin that keep the business running.
- Net Profit: What’s left.
Sometimes the top line looks healthy, but a closer look reveals a course, membership, or service is eating up more than it brings in.
What makes an offer profitable:
- You know your cost per delivery.
- You set a price with margin built in.
- You adjust as you go based on real-time financial insights.
Profit is not an accident. It’s a decision, and a discipline.
Client example:
A client running an elevated fitness studio thought her private sessions were the top revenue driver. But once we analyzed her numbers, we discovered that her themed group classes were yielding higher margins—even after factoring in staffing, rentals, and supplies. By shifting her marketing and staffing plan to reflect this insight, she added five figures in net profit over the next quarter.
Your Turn:
Pick one of your offers and calculate:
- Revenue generated in the last 6 months
- Costs directly related to delivering it (time, labor, software, etc.)
- Estimated profit margin
Compare it to another offer. You may be surprised by what’s truly profitable.
Part 3: Emotional Decisions vs. Strategic Decisions
When entrepreneurs avoid looking at their numbers, they often default to emotional decision-making:
- “I feel like this isn’t working.”
- “I think we need to discount.”
- “I’m afraid to raise prices.”
Sometimes even positive emotions can lead us astray:
- “We’re so busy—we must be making a lot of money.”
- “Everyone’s booking this offer—it must be our most profitable.”
- “Our calendar is full, so the financial side must be fine.”
These assumptions may feel reassuring, but they often don’t hold up under financial scrutiny. Busyness does not always translate to profitability. A full calendar with underpriced services or untracked expenses can result in burnout and negative margins.
But feelings, while valid, should not be the sole driver of financial decisions. Strategy comes from data. That doesn’t mean becoming robotic. It means letting your numbers guide your instincts.
Example:
Another client believed a group program was underperforming. Once we reviewed the numbers, we realized it had generated over 30% more profit than the offer she assumed was the top performer.
Why we avoid the data:
Entrepreneurs, especially those who lead with their heart, often avoid financial data due to fear, shame, or fatigue. At Two Arrows, we offer a safe space to look together. Your numbers don’t define your worth—they inform your next move.
Reframe Your Role:
Looking at your numbers doesn’t mean you’re a bookkeeper. It means you’re leading your business with clarity, like a CEO.
Part 4: Setting a Rhythm for Financial Review
Clarity and confidence come from consistency. Financial resilience doesn’t happen in a quarterly panic or once-a-year tax sprint. It’s built in your regular rhythms.
We recommend:
- A monthly Financial Focus Session using the Two Arrows Financial Focus Guide
- Quarterly reviews for revenue mix, profit margins, and expense audits
- Mid-year planning check-ins to recalibrate
What is a Financial Focus Session?
It’s a time you carve out monthly to reflect on your current financial data, recent shifts in your business, and what you want the next 30–90 days to look like. The Financial Focus Guide walks you through:
- Reviewing current financial patterns
- Identifying seasonal or emerging trends
- Clarifying goals and what metrics to monitor
- Addressing bottlenecks, both financial and operational
This is your executive moment—one that bridges strategy and stewardship.
Beginner, Growth, and Executive Rhythms:
- Foundational: Look at income and expenses monthly; reconcile accounts.
- Scaling: Use dashboards; track key performance indicators.
- Executive-Level: Host monthly or quarterly meetings with your advisor or bookkeeper; use forecasting tools to plan for hires, launches, or exits.
Helpful Practice:
Treat your Financial Focus Session like a standing meeting with your business’s future. Put it on your calendar, make a ritual of it, and stick to it.
Part 5: Scaling Intentionally with Financial Insight
Want to scale? Then you need to:
- Know what it costs to serve at your current level.
- Have a plan for maintaining quality at a larger scale.
- Understand the levers in your business: pricing, volume, capacity, conversion.
Whether you’re launching a membership, adding a team member, or considering acquisition, strategic growth is a numbers game. But it’s also a leadership mindset shift.
Client Conversation Highlight:
In one recent consultation, a client was looking to scale their group program. Instead of focusing on volume alone, we mapped out the staffing and tech needs required to maintain their current experience at double the size. It revealed that a small price increase would relieve pressure and increase margins—no extra seats required.
Ask Yourself:
- Do I know my break-even point for each offer?
- What are the non-negotiables in maintaining my client experience?
- Am I scaling by addition or intention?
You don’t need to be the bookkeeper—you need to lead like a CEO who understands the story their numbers are telling.
Luxury is Peace of Mind
At Two Arrows, we believe financial clarity is a form of luxury. Not because the numbers are glamorous, but because they give you peace of mind. They free you to make decisions with confidence, to pivot when needed, and to grow without guessing.
Whether you’re starting your next offer or reevaluating the way you scale, let your finances be part of the conversation from day one. The tools are available. The support exists. And the rhythm you build today becomes the strategy that carries you forward.
Explore More:
Ready to bring more clarity, confidence, and control to your financial decisions? Download the Financial Focus Guide and begin building a rhythm of intentional review. When you’re ready, we’ll be here.
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