The numbers that matter: a simple guide for social entrepreneurs
Your straightforward guide to the financials to keep an eye on as a social entrepreneur.
Running a social enterprise often starts with a deep understanding of your community and a clear sense of purpose. That’s your strength. But when you’re busy delivering impact, the financial side can slip into the background.
You don’t need to be a seasoned “business person” to get this right. You just need a few tools that help you make steady, confident decisions. Every day-to-day choice - from hiring a casual worker to ordering supplies - eventually shows up in your numbers. Knowing what to look for helps you protect your mission and do more good now and into the long term.
Let’s take it step by step...
The three financial statements
Think of these as three different viewpoints that help you see your organisation clearly. Together, they give you a sense of stability, pressure points and possibility.
1. Income statement
Your income statement shows whether you made a profit or loss over a set period.
It includes:
Income – sales, grants, contracts, service fees
Direct costs – what it costs to deliver your work
Overhead costs – the ongoing costs of running the organisation
What to pay attention to:
Are your delivery costs rising faster than expected? Are you bringing in enough to comfortably cover your work? Any patterns or noticeable changes you can’t quite explain? These are usually the clues that matter.
2. Balance sheet
Your balance sheet is a snapshot of what your organisation owns, what it owes, and what’s left over.
It covers:
Assets – cash, inventory/stock, vehicles, equipment, money owed to you
Liabilities – bills, loans, taxes, anything you must pay
Equity – the difference between Assets and Liabilities
Worth checking:
Do you have enough cash or short-term assets to pay upcoming bills? Are people taking longer to pay you? Is money tied up in equipment or stock that you don’t really need right now?
These questions help you understand your organisation's stability, not just its activity.
3. Cashflow statement
Your cashflow statement shows real money in and real money out.
This answers the practical question many social entrepreneurs quietly worry about: Are we going to be okay this month?
You can be profitable on paper but still short on cash if people pay you late or big bills fall at the wrong time. Cashflow is the clearest way to spot pressure before it becomes a crisis.
Look to the future, not just the past
Once you understand the three statements, use the following two tools to help you steer ahead rather than simply react to situations.
Budget
A plan completed in advance, to map how you intend to spend money in your business.
Forecast
A rolling, real-time prediction based on whether your business is meeting the set budget.
Together, these tools help you adapt early, scale responsibly and avoid decisions that compromise your mission.
Financials to keep an eye on
The handful of numbers to check regularly
With so much going on, it's tempting to leave 'the numbers’ up to your accountant, or resident finance person, but as the leader of the organisation you must stay aware of your finances.
You don’t need to track everything. Start with these few indicators that give you a good sense of what’s going on. Then you can have a chat with your ‘numbers person’ if there’s anything you don’t understand or is worrying you.
Cash in bank
A simple weekly check on how much cash you actually have on hand – ensure you have enough to cover bills, payroll and any commitments coming up.
Income patterns
Are payments arriving when you expected? Any delays? Any drop-off you didn’t plan for?
Debtors
If people are taking longer to pay you than before, that’s worth your attention. It’s one of the earliest warning signs of pressure.
Major costs
Staffing, production, delivery, rent, tech - these often shape your whole model. When one shifts, it affects everything.
Upcoming commitments
Think about annual renewals, equipment replacements, seasonal shifts, tax deadlines. Noticing these in advance keeps you in control.
Why this matters
Understanding your numbers doesn't mean you have to become a finance expert. But doing so will give you the confidence to make decisions that protect your mission and strengthen your organisation.
At Sefa, we’ve supported more than 170 organisations. We've found that the leaders who feel most grounded aren’t the ones with perfect spreadsheets, they’re the ones who understand their model well enough to act early, plan clearly and ask for help when needed.
Do more good with Sefa
Whether you are strengthening your impact foundations or planning to scale, we offer finance and advice to help you grow with clarity, confidence and care.