How a Tiny Concept Can Change How You Feel About Your Business
By Michelle Salisbury & Ebonee Tomasini
May 2025
Let’s talk about the small things—the ones that tend to go unexplained. The concepts you assume everyone else understands but you somehow missed. You’re not alone. It’s more common than you think.
Understanding the small things often leads to those powerful "aha!" moments—suddenly, everything clicks.
By taking the time to understand some basic business concepts and staying up to date with what technology can offer, you can elevate your business one step at a time.
Start with a single concept. Get your head around it, identify a solution if needed, and move to the next.
A great place to start is with your financial statements.
Common Business Lingo—Simply Explained
Running a business is hard enough without having to decipher confusing financial statements. For many small business owners, Profit & Loss (P&L) statements and Balance Sheets can feel overwhelming—but they don’t have to be.
When explained simply, these documents become powerful tools to help you understand your business’s performance and plan your next steps.
Here’s a quick breakdown:
Profit & Loss Statement: Think of this as your business’s scoreboard. It tracks money in (sales) vs. money out (expenses), showing you what’s left over (profit).
Balance Sheet: This is more like a health check. It shows what you own (assets), what you owe (liabilities), and what’s left (equity).
You don’t need fancy terms—just these basics:
Sales = money in
Expenses = money out
Profit = what’s left
Assets = what you own
Liabilities = what you owe
Equity = your business’s value
Rather than getting lost in the numbers, focus on what they’re telling you. For example:
If sales are down, demand might be decreasing.
If costs are climbing, it might be time to review your suppliers.
Most accounting software can help you visualise your data using bar charts or trend lines. These make it much easier to see what’s working and what’s not.
Focus on a few key figures—total sales, net profit, cash on hand, and debts owed—and track them monthly, quarterly, and yearly to identify trends and guide decisions.
In Summary
Stay curious and ask questions. Be open to learning through coaching. Success in business takes discipline, but also the right mindset and support.
Need help interpreting your data or turning it into meaningful visuals? Speak to your accountant today or give us a call at (08) 9841 1200.
Coming Up Next: Is it Time to Rethink Your Payroll?
Is your payroll system outdated and time-consuming? Or could it simply be better?
With powerful cloud-based payroll solutions now available, many businesses are unlocking new levels of flexibility and efficiency. From remote access and employee self-service to seamless integration with accounting software, modern payroll systems are doing more than ever before.
Understanding your payroll system's full potential could be a game-changer.
In our next edition, we’ll explore:
Getting ready for the end of financial year with STP finalisation
The benefits of apps for things like timesheets, leave requests and payroll system onboarding
Tools for improved compliance and reporting
Are you getting the best from your current payroll software?
Stay tuned—there’s a lot to unpack.
Introducing Cultivate Finance Broking
Our New Partner
We’re excited to share that Lincolns has partnered with the owners of Successiv to launch a new business, Cultivate Finance, offering rural, business and personal finance services.
Cultivate Finance operates independently from Lincolns, with its own name and identity, to ensure a clear and focused service offering.
If you’d like to learn more about Cultivate Finance, feel free to reach out – we’d be happy to connect you.
