Exposed: Why Most Business Coaches Are Financially Illiterate—And What It Costs You
March 18, 2025
Want to stop flying blind in your business? In this episode of the Small Business Black Holes, Alan and Tonya dive deep into why proper accounting is the non-negotiable foundation every business owner needs. Learn why tracking just 7 key financial metrics can transform your decision-making, how to break out labor costs correctly, and why many business coaches are missing the mark by ignoring financial fundamentals. Whether you're doing $500K or $5M in revenue, this conversation offers actionable insights to help you build the financial clarity needed for sustainable growth. Tune in to discover why accounting isn't just about tax compliance – it's about speaking the true language of business.
In this episode of the Small Business Black Holes, Alan Pentz and Tonya Berenson discuss the critical importance of proper accounting practices for small businesses, drawing from Alan's experience as a business coach and founder of Owner Institute to highlight common financial oversight pitfalls and their solutions.
What You'll Learn:
- Why basic accounting is the "language of business" and how to master the seven fundamental metrics every business owner must track
- How to properly structure your accounting by separating direct labor costs from administrative expenses
- The crucial timing principle: why financial data should be available within two weeks of month-end
- Why most business coaching fails to address financial fundamentals and how to ensure you're getting complete guidance
- How to identify when it's time to hire a bookkeeper (typically around 20 monthly transactions)
- The essential difference between managing to bank balance versus proper accrual accounting
- How to break down labor costs between Cost of Goods Sold (COGS) and administrative expenses for accurate profitability tracking
- Why tracking key metrics on a trailing twelve-month basis provides crucial business intelligence for decision-making
Highlights:
[03:10] The Critical Revenue Threshold for Professional Bookkeeping
[03:10] The Critical Revenue Threshold for Professional Bookkeeping
[11:21] Properly Categorizing Labor Costs for Accurate Profitability Analysis
[14:23] The Million-Dollar Lesson in Financial Literacy
[27:41] The Hidden Danger of Poor Financial Understanding
Owner Institute website
Corner Alliance LinkedIn
The New Rules Podcast is handcrafted by our friends over at fame.so
Check out our three most downloaded episodes:
Check out our three most downloaded episodes: