Latest / Profit Points Podcast / Decision Fatigue Is Costing You: How Cost Clarity Makes Business Decisions Easier

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Decision Fatigue Is Costing You: How Cost Clarity Makes Business Decisions Easier · Profit Points Podcast

• 0:00
  SPEAKER_00: Hey, glad you're here.
• 0:01
  SPEAKER_00: This is Profit Points, and I'm Megan Schwann, your accounting sidekick and certified profit for professional and fix the sex advisor.
• 0:09
  SPEAKER_00: If you're a small business owner who wants to actually understand what is happening in your business financially, not just survive it, but genuinely get it, you're in the right place.
• 0:20
  SPEAKER_00: Every episode covers one concept, uses real numbers, and ends with something you can actually do.
• 0:26
  SPEAKER_00: That's the deal.
• 0:27
  SPEAKER_00: Let's talk about today's topic.
• 0:31
  SPEAKER_00: Let me ask you a really real question.
• 0:35
  SPEAKER_00: Do you feel tired by your business?
• 0:39
  SPEAKER_00: Not physically tired from the work, but like mentally exhausted by the constant stream of decisions.
• 0:47
  SPEAKER_00: Things like, should I hire?
• 0:49
  SPEAKER_00: Can I afford this tool?
• 0:51
  SPEAKER_00: Should I raise my prices?
• 0:54
  SPEAKER_00: Do I need more clients or better clients?
• 0:57
  SPEAKER_00: Should I invest in this course?
• 0:59
  SPEAKER_00: Or save the money?
• 1:01
  SPEAKER_00: Should I learn this AI tool?
• 1:03
  SPEAKER_00: Or this other one over here?
• 1:05
  SPEAKER_00: If you're nodding along, I want to offer you a reframe.
• 1:10
  SPEAKER_00: What you're experiencing might not be burnout, but it might be decision fatigue.
• 1:18
  SPEAKER_00: And it has a very specific cause that we can actually fix.
• 1:23
  SPEAKER_00: Welcome back to the Prophet Points Podcast.
• 1:26
  SPEAKER_00: I'm Megan Schwann, and today we are going to troubleshoot decision fatigue as a CEO.
• 1:33
  SPEAKER_00: First, let's talk about what is decision fatigue.
• 1:38
  SPEAKER_00: Decision fatigue happens when you have to make too many decisions without enough information or too many decisions at the same time.
• 1:49
  SPEAKER_00: In a business context, it shows up when you're trying to make financial calls without financial clarity.
• 1:56
  SPEAKER_00: Every time you sit down to decide whether you can afford something, you're doing mental math that shouldn't be mental math.
• 2:06
  SPEAKER_00: You're trying to hold your revenue, your expenses, your pending invoices, your upcoming bills, and your bank balance all in your head at the same time.
• 2:16
  SPEAKER_00: And then make a judgment call about what's safe.
• 2:20
  SPEAKER_00: This is an enormous, enormous cognitive load.
• 2:24
  SPEAKER_00: And it's a load that you don't have to actually carry.
• 2:29
  SPEAKER_00: The business owners that I work with who have the most energy, who feel the most in control and the least anxious are almost always the ones with the clearest financial picture.
• 2:43
  SPEAKER_00: And that's not a coincidence.
• 2:46
  SPEAKER_00: When your numbers are clear, decisions stop being guesses and start being obvious.
• 2:53
  SPEAKER_00: The data makes the call for you, eliminates that decision fatigue, right?
• 3:00
  SPEAKER_00: So today, profit point is cost clarity.
• 3:06
  SPEAKER_00: And I define cost clarity as knowing with actual numbers what it costs to run your business, what it costs to deliver your products or services, and what your true profit is after all of that.
• 3:20
  SPEAKER_00: When you have cost clarity, that fog that you feel, the overwhelm that you feel, it lifts.
• 3:28
  SPEAKER_00: You stop guessing and you start deciding.
• 3:32
  SPEAKER_00: That$200 software subscription that sneaks in, you either know you can absorb it without impacting your goals, or you know it could push your operating expenses above your target threshold.
• 3:46
  SPEAKER_00: Either way, you have an answer.
• 3:48
  SPEAKER_00: And having an answer, even if it's a no, is so much less exhausting than uncertainty, isn't it?
• 3:59
  SPEAKER_00: Let's walk through this and what it looks like.
• 4:03
  SPEAKER_00: I am going to attempt to share my screen.
• 4:08
  SPEAKER_00: I tried to do this last time and it didn't work.
• 4:10
  SPEAKER_00: Okay.
• 4:11
  SPEAKER_00: But today is a new day.
• 4:17
  SPEAKER_00: And I had it and I tested this.
• 4:20
  SPEAKER_00: I did, I swear.
• 4:21
  SPEAKER_00: Okay, hold on.
• 4:22
  SPEAKER_00: Where is my always when it's on screen, right?
• 4:31
  SPEAKER_00: Okay, okay.
• 4:32
  SPEAKER_00: Here we go.
• 4:32
  SPEAKER_00: Here we go.
• 4:33
  SPEAKER_00: I think I got it.
• 4:34
  SPEAKER_00: Okay.
• 4:35
  SPEAKER_00: So do that.
• 4:37
  SPEAKER_00: And then we're gonna do this.
• 4:43
  SPEAKER_00: Almost there, almost there, almost there.
• 4:45
  SPEAKER_00: Okay, got it.
• 4:47
  SPEAKER_00: Let's walk through what this looks like.
• 4:50
  SPEAKER_00: Get your cal get your calculator out or follow along with mine.
• 4:54
  SPEAKER_00: Say your business has a monthly revenue of$18,000.
• 4:59
  SPEAKER_00: Fixed cost, rent of applicable, software, insurance, phone, recurring contractors, let's say that all totals$5,200.
• 5:09
  SPEAKER_00: Your variable costs, things that fluctuate based on client volume, average about$3,000.
• 5:16
  SPEAKER_00: So let's say$5,200.
• 5:21
  SPEAKER_00: Your owner's pay goal is$5,000 per month.
• 5:28
  SPEAKER_00: $5,000.
• 5:30
  SPEAKER_00: And you want to set aside at least 15% of revenue for profit, which is about$2,700.
• 5:38
  SPEAKER_00: Add that all up and subtract it.
• 5:43
  SPEAKER_00: So adding it all up is$15,900.
• 5:46
  SPEAKER_00: You're running an$18,000 business with$15,900 in committed cost, that leaves you$2,100 of breathing room.
• 5:57
  SPEAKER_00: So now that$2,100 gap is your decision-making zone.
• 6:03
  SPEAKER_00: When someone asks you if you can hire a part-time VA at$800 a month, you know you have the answer.
• 6:10
  SPEAKER_00: You said, Oh, I got$1,200 or$2,100 of a margin,$800 fits in that.
• 6:16
  SPEAKER_00: You have room to spare.
• 6:17
  SPEAKER_00: You don't have to think hard about it.
• 6:20
  SPEAKER_00: The numbers told you.
• 6:21
  SPEAKER_00: This is cost clarity when you know.
• 6:24
  SPEAKER_00: And it is the antidote to decision fatigue.
• 6:28
  SPEAKER_00: Without that clarity, that same VA question spirals into well, I think I'm making enough, but last month was slow and I'm not sure what's coming in next month.
• 6:40
  SPEAKER_00: And I don't want to commit to something I can't sustain.
• 6:44
  SPEAKER_00: And suddenly, that simple hiring question decision is a two-week anxiety spiral.
• 6:53
  SPEAKER_00: The math wasn't complicated, but the uncertainty was.
• 6:58
  SPEAKER_00: Okay, so now I can stop sharing my screen.
• 7:02
  SPEAKER_00: Here's your action step.
• 7:04
  SPEAKER_00: You got that?
• 7:05
  SPEAKER_00: This is this is what we do when we implement profit first as well.
• 7:09
  SPEAKER_00: In a lot of cases, we're setting up a different bank account for that$2,100 to go into so that even just looking, you know exactly how much of a nest egg or how much money you can strategically reinvest for those opportunities into your business because you already have that money set aside and the other buckets and accounts are already covered because of those percentages that we split up based off of your income.
• 7:34
  SPEAKER_00: Anyways, contact me if you want to learn more about Profit Verse and how to put that in place.
• 7:38
  SPEAKER_00: But for your action step this week, I want you to build what I call the monthly net.
• 7:44
  SPEAKER_00: It's a simple list of every fixed cost in your business, every single recurring um cost that you have, and um put it in a spreadsheet.
• 8:00
  SPEAKER_00: So you can look.
• 8:01
  SPEAKER_00: What is what are all those expenses?
• 8:04
  SPEAKER_00: Add them up.
• 8:04
  SPEAKER_00: That is that total is gonna be your floor, the minimum your business needs to generate just to break even before you even pay yourself a dollar.
• 8:14
  SPEAKER_00: Sometimes I like to include that in there as well, along with your tax savings and that strategic profit you want to put in, because then that monthly nut shows you exactly what you need as cash flow every single month so that you know you have all of these other planned costs and things covered.
• 8:32
  SPEAKER_00: Once you know that, you have a foundation for every single financial decision that you need to make.
• 8:38
  SPEAKER_00: Write it down, you can put it somewhere visible, and then update it at least quarterly.
• 8:45
  SPEAKER_00: Okay.
• 8:46
  SPEAKER_00: Look, clarity is not a luxury for big businesses with CFOs on staff.
• 8:52
  SPEAKER_00: Clarity is a practice, and it's available to every single business owner, willing to spend a little bit of time with their numbers.
• 9:00
  SPEAKER_00: When you have it, the decisions that used to drain you start to feel easy.
• 9:06
  SPEAKER_00: That fog that we talked about lists, and you get to show up for your business and honestly, your family, your team, your clients, pretty much everyone with the energy that they actually deserve.
• 9:21
  SPEAKER_00: All right.
• 9:22
  SPEAKER_00: Off my soapbox, we talked about this today.
• 9:26
  SPEAKER_00: Getting clear on our numbers and our cost, cost clarity.
• 9:29
  SPEAKER_00: If you want help building that clarity, if you want someone to sit down with you and actually map out your numbers so that your decisions feel easier, book a call with me at chatwithmake.com takes you to our website where you can book a call, no strategy call.
• 9:48
  SPEAKER_00: It is no obligation, no pressure.
• 9:51
  SPEAKER_00: Everybody walks away with some kind of takeaway.
• 9:53
  SPEAKER_00: Even if you don't hire us for anything else, it's a great time to talk through this.
• 9:59
  SPEAKER_00: The link is chatwithmeg.com.
• 10:02
  SPEAKER_00: We make this stuff approachable.
• 10:04
  SPEAKER_00: I promise.
• 10:05
  SPEAKER_00: I will see you next week on the Profit Points podcast.
• 10:08
  SPEAKER_00: Lean into those numbers.
• 10:10
  SPEAKER_00: They are going to help you avoid a lot of problems in the long run if you embrace it.
• 10:15
  SPEAKER_00: All right, talk to you next week.
• 10:17
  SPEAKER_00: Bye.
• 10:18
  SPEAKER_00: All right, that's your episode this time.
• 10:20
  SPEAKER_00: Don't forget your action step.
• 10:22
  SPEAKER_00: I want you to actually do it, not just add it to the list.
• 10:26
  SPEAKER_00: If this episode was helpful, share it with a fellow business owner who needs to hear it.
• 10:30
  SPEAKER_00: And if you're ready to go deeper on your specific numbers, book a strategy call with Sidekick Accounting.
• 10:36
  SPEAKER_00: Go to chatwithmeg.com, and I'll see you next time on Profit Points.