“Numbers are the foundation of every successful business. When you understand and track your numbers, you’re not just running a business—you’re steering it in the right direction with purpose and clarity.”
– Roger Knecht
In the fast-paced world of business, understanding your numbers is key to long-term success. Whether you’re an entrepreneur just starting out or a seasoned business owner, mastering your financials can make or break your journey. Today, we’re excited to have Roger Knecht, the president of Universal Accounting School, join us for an in-depth conversation about the power of numbers in business. With decades of experience in the accounting and finance industry, Roger is a leader in helping accounting professionals and business owners alike gain the skills they need to thrive. His passion for helping others get “paid what they’re worth” is at the core of Universal Accounting School’s mission.
Universal Accounting School, founded in 1979, provides specialized training for accounting professionals, bookkeepers, and business owners, empowering them with the tools and certifications necessary to succeed. Roger and his team are committed to making accounting accessible and valuable for business owners of all sizes. Through coaching, courses, and a wealth of resources, Universal Accounting School equips professionals with the knowledge to manage finances, optimize business performance, and achieve profitability. Today, Roger shares his insights on how understanding your numbers can transform your business, giving you the clarity and confidence to make smarter decisions.
Let’s dive into this enlightening conversation and uncover the strategies that can take your business to the next level!
Thank you so much for joining us, Roger! Our readers would love to get to know you a bit better. Can you tell us a bit about your backstory?
Thank you, Stacey! It’s a pleasure to be here. Well, my journey into the world of accounting started many years ago, but what truly sparked my passion was recognizing how many business owners and professionals struggled to understand their financials. I realized there was a gap in how we educated people about accounting—not just as a profession but as a tool for running successful businesses. That led me to Universal Accounting School, where we help individuals gain the skills to start and grow their accounting businesses. We also focus on training people to truly understand the value of numbers in their businesses. At the end of the day, it’s about helping people get paid what they’re worth and run their businesses more effectively.
That sounds amazing! You mention numbers quite often. What exactly do you mean when you say numbers are the key to business success?
When I talk about numbers, I’m referring to much more than just the financials or accounting sheets we look at during tax season. Numbers are the language of business—they tell the story of how well you’re doing, where you’re thriving, and where there are opportunities to improve. If you’re only looking at your numbers once a year, you’re missing out on critical data that can shape your daily decision-making. When you understand your numbers—revenue, profit margins, cost of goods sold—you can make informed choices that will directly impact your growth and sustainability.
For example, let’s say you need to generate $10,000 in revenue each month to cover expenses and make a profit. By breaking that down into how many sales you need to make, what your costs are, and where you can cut back, you can strategize more effectively. Numbers don’t lie, and they don’t carry emotion. They just give you the facts, which is something every business owner needs.
That makes a lot of sense! So, for someone starting out, what’s the first step to becoming successful when it comes to understanding business numbers?
The first step is to acknowledge that numbers are not just for accountants. They’re for every business owner. You need to recognize that numbers allow you to take the emotion out of your decisions and instead focus on what the business is telling you. Once you understand that, the next step is setting clear metrics. What does success look like for your business? Is it hitting a certain revenue number each month? Is it keeping your costs under control? Defining these metrics helps you see your progress—or lack thereof—and gives you something tangible to aim for.
Can you give us an example of some of the key numbers business owners should be paying attention to?
Sure. There are a few that are absolutely critical. First, your revenue target—how much money do you need to bring in each month or quarter to cover your expenses and still turn a profit? Then, you need to focus on your profit margins. It’s not just about how much money you make, but how much you get to keep after covering your costs. Your cost of goods sold, or COGS, is also key—it helps you understand how much it costs to actually produce the goods or services you’re selling.
Another number people often overlook is their cash flow. Even if your business is profitable on paper, if you don’t have cash flowing in at the right times to cover your immediate expenses, you’re going to run into trouble. These are just a few examples, but they’re a great starting point for anyone wanting to get a handle on their business.
I see! So many business owners tend to overlook their numbers until it’s time to file taxes. What’s your take on that?
Oh, Stacey, that’s one of the biggest mistakes I see. If you’re only looking at your numbers once a year or even once a month, you’re setting yourself up for surprises—and not the good kind! Think of it like this: your numbers are the pulse of your business. If you’re only checking in sporadically, how will you know if something’s wrong before it’s too late? You should be tracking your numbers weekly, if not daily. This way, you can catch problems early and course-correct. For example, if you notice your sales are starting to dip in real-time, you can address the issue before it turns into a major loss.
That’s great advice! So, what are some common mistakes you’ve seen business owners make that really hurt their growth?
One of the most common mistakes is not having a clear business model with set financial goals. Without a roadmap, you’re essentially just guessing and hoping things will turn out okay. Another issue I’ve seen is ignoring leading indicators—things like marketing metrics or sales activity that show you where your business is heading. Too many people only focus on the lagging indicators, such as profit and loss, after it’s too late to make a difference. If you’re proactive and focus on the leading indicators, you can often prevent problems before they happen.
That’s so true. Now, let’s talk about competitors. How can business owners use numbers to compare themselves to their competition?
Benchmarking is a powerful tool. It allows you to see where you stand in comparison to your competitors, which is incredibly valuable. You can look at things like profit margins, marketing spending, payroll, and other key metrics. Are your costs higher or lower than the industry average? Are your profit margins on par? This kind of comparison can highlight areas where you might be overspending or underperforming. It also helps you identify opportunities where you can make improvements to gain a competitive edge. I think it’s not just about beating the competition but about improving your own processes by learning from what’s working for others in your industry.
That’s so valuable. Do you think businesses that fail to adapt to modern practices, like online marketing or technology, struggle more than others?
Absolutely. Business practices have evolved so much over the past decade, and if you’re still doing things the way you did ten years ago, you’re likely missing out on efficiency and innovation. Take marketing, for example. What worked a decade ago—like print advertising—might not work today. The same goes for operations. The businesses that refuse to adapt often get stuck, and it shows in their numbers. The key to long-term success is staying agile and being willing to change when the market demands it.
You talked earlier about leading and lagging indicators. Can you explain the differences and why they matter?
Sure! Leading indicators are the activities and actions that will influence your future outcomes. These could be things like the number of leads generated, the number of sales calls made, or the amount spent on marketing campaigns. They give you insight into what’s happening now and can predict what will happen in the near future.
Lagging indicators, on the other hand, show the results of those actions—things like revenue, profit, and customer retention. By focusing on the leading indicators, you can adjust your strategy before it’s too late. For instance, if your sales team isn’t generating enough leads, you’ll see that reflected in your future revenue. Leading indicators allow you to course-correct before the lagging indicators show a downturn.
That makes perfect sense. Let’s switch gears a bit. What role does emotion play in business decisions, and how can numbers help mitigate impulsive decisions?
Emotion is a double-edged sword in business. On one hand, passion is what drives many entrepreneurs to start their own businesses. On the other hand, that same passion can lead to impulsive, emotion-driven decisions. That’s where numbers come in—they’re the reality check. You may feel excited about a new idea, but when you look at the numbers, they might tell you that it’s not the right time or that the investment is too risky. Numbers help you make decisions based on facts rather than feelings. They don’t take away your creativity or drive, but they ensure that your decisions are grounded in reality.
I completely agree. Let’s talk about mindset for a moment. What’s the biggest mindset shift entrepreneurs need to make in order to succeed?
The biggest shift is moving from working in your business to working on your business. It’s easy to get caught up in the day-to-day tasks—answering emails, managing operations, dealing with customers. But if you’re constantly in the weeds, you’re not thinking strategically. You need to step back and look at the bigger picture. Ask yourself: how can I scale? Where do I need to invest more resources? What systems can I improve? It’s about thinking like a CEO rather than just an employee in your own business.
That’s so important! Now, a lot of business owners face financial stress, especially when numbers aren’t adding up. How do you recommend they handle that?
Financial stress is inevitable in business, but the key is not to panic. When things aren’t adding up, the first thing you need to do is take a deep breath and dive into your numbers. Where is the shortfall? Is it in revenue, cash flow, or expenses? Sometimes, the solution is as simple as adjusting your pricing or cutting back on unnecessary spending. The important thing is to stay calm and make decisions based on data, not fear. And always remember, if you’re tracking your numbers regularly, you’ll catch these issues before they become overwhelming.
That’s great advice. With the rise of online business, how has accounting evolved to meet the needs of digital entrepreneurs?
Accounting has evolved a lot! With digital entrepreneurs, everything moves faster, and there’s a demand for real-time data. Cloud-based accounting tools like QuickBooks or Xero have made it so much easier to manage finances in real-time. You can automate bookkeeping, invoicing, and even tax preparation. This means you don’t have to spend hours entering data manually, which frees up time to focus on growing the business. For digital entrepreneurs, it’s a game-changer.
Speaking of growth, what’s one often overlooked way businesses can increase their profit margins without necessarily cutting costs?
One of the most overlooked strategies is focusing on client retention. Acquiring new customers is great, but keeping your existing ones happy can be much more cost-effective. Think about it—your existing clients already know your product, they trust you, and they’re likely to spend more over time. Implementing loyalty programs, offering exceptional customer service, and following up regularly can significantly increase your revenue without increasing your costs.
That’s so true. What’s one piece of advice you’d give to someone just starting out as an entrepreneur?
My biggest advice for new entrepreneurs is to build a solid foundation from the start. Understand your financials, set clear goals, and stay adaptable. Don’t be afraid to ask for help—whether from mentors, accountants, or business coaches. Having the right team around you can make all the difference. Also, remember that every business faces challenges, so resilience is key. Stick to your numbers and your plan, and you’ll have a better chance of overcoming obstacles.
This has been a fantastic conversation, Roger. Before we wrap up, how can our readers further follow your work online?
Thank you, Stacey! Readers can find more resources on Universal Accounting School’s website. We have free e-books like In the Black and Your Strategic Accountant, as well as tools like the business score, which helps with SWOT analyses. I also encourage anyone interested to check out our business coaching services through Universal Business Builder. We provide a lot of support to help businesses grow and succeed.
Thank you so much, Roger! This has been incredibly enlightening. We look forward to having you back again soon!
It’s been a pleasure, Stacey. And remember, if it’s about accounting, it is universal!
