EBITDA and net income for small business owners
If you've ever looked at your financial reports and found yourself wondering what EBITDA and net income really mean, you're not alone.
These two terms show up often in financial statements, but they tell very different stories.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. In simple terms, it gives you a picture of how well your business is performing from an operational standpoint, before any financial decisions or accounting adjustments come into play.
Net income, however, is the final figure after all expenses, taxes, and interest are deducted. It’s the number that reflects your actual profit and is typically what shows up on your tax return.
Let’s look at some examples. Say you run a small marketing agency. EBITDA would reflect your revenue from client projects minus regular operating expenses like software subscriptions, staff wages, office rent, and utilities. It would not factor in interest on a business credit card or depreciation on your office equipment.
Net income, however, would include those items, giving you a more comprehensive view of your true profit.
Or take a retail shop owner who took out a loan for a shop renovation. EBITDA would show how profitable the store is from sales after paying suppliers and staff, but net income would show the impact of repaying that loan and the wear and tear on the new fit-out.
Both numbers are useful, but they serve different purposes. EBITDA is often helpful for tracking operational health and comparing performance across time or other businesses, while net income helps you prepare for tax season and plan for reinvestment or withdrawals.
If these numbers still feel unclear or you’re not sure which one to pay attention to when making decisions, we’re here to help. We’re bookkeeping experts who help small business owners get clear around their numbers so they can scale and grow with confidence.
What to Watch Out for in Business Financial Advice
There’s no shortage of financial advice out there for small business owners especially with so much of it circulating on social media. You’ve probably seen the posts that say you should invest more, save less, raise your prices, hire faster or the opposite.
The truth is, not every tip applies to every business. What works for one may not work for another, and discernment is key.
Look at who the advice is coming from. Are they running a business like yours? Do they understand your industry, your size, or your stage of growth? Context matters.
Be cautious with one-size-fits-all tips. Advice like “you must have five income streams” or “every business should hire a team” can create pressure that doesn’t align with your goals or current reality.
Always tie advice back to your numbers. Before making a decision, check your cash flow, profit margin, and budget. Good advice supports what your numbers can realistically handle.
Just because something worked during someone else’s launch or busy season doesn’t mean it’s the right move for your business right now. Timing is everything.
Free advice isn’t always the best advice. It’s okay to invest in support from someone who understands your business and your vision, especially when it comes to finances.
Look for patterns, not just hype. Consistent results over time are more valuable than quick wins that aren’t sustainable.
Trust your gut, but back it up with data. You know your business better than anyone. Use your instincts, but let your numbers guide your decisions.
We work with business owners from all walks of life, and we know that thoughtful, personalized strategy is what makes a real difference. Numbers are the foundation, and when you use them with intention, you make smarter choices ones that actually serve your business long-term.
If all the advice out there has you feeling a bit unsure about what actually applies to your business, just reach out. We’ll help you sort through the noise and focus on what really matters for your numbers.
Running a Seasonal Business: What Every Owner Should Know
If your business has a busy season and a slower one, you know the financial highs and lows can feel intense. Whether you're preparing for peak months or navigating the quieter times, good planning makes all the difference.
Here are some financial tips to help you manage your seasonal cash flow and set your business up for year-round stability:
Use your peak-season income to support slower months. Look at your full-year forecast, not just your high-revenue periods.
Put money into a savings account when revenue is strong. It’ll help cover overhead when things slow down, so you can avoid scrambling.
Review last year’s sales and expenses. Are there patterns? Knowing when to cut back or ramp up spending can help you stay in control.
Know how much you need to bring in each month to cover your essentials. That number matters even more for seasonal businesses.
Use the off-season to catch up on your books, review your pricing, plan content, or invest in systems that will make your busy season run smoother.
Build business credit by making timely payments and keeping credit usage low. Strong credit can open doors to better funding and terms when you need them.
Apply for a line of credit while revenue is strong. It gives you financial breathing room during slower months and keeps you from relying on high-interest options.
We help businesses from all backgrounds, shapes, and sizes. Whether you're just getting started or scaling to the next level, numbers are the language we speak and we use them to help you build clarity, strategy, and stability in your business.
If you're ready to get clear on your cash flow and plan with more confidence, reach out. We'd love to support you.