Hustle vs. Strategy: Do You Have a Northstar Number?

Plenty of entrepreneurs have businesses that appear to be doing well, but the owner feels like no money is being made. These business owners are hustling, making sales, but not building something that consistently supports their lives.

Hustle keeps you active. Strategy gives you a destination.

After 17 years as a CPA working with real business owners, the gap I see most often is not effort. It is the absence of one number. I call it the Northstar number.

Before I built a firm around strategy and clarity, I owned a promotion company that worked with record labels and brands, where many decisions were made on instinct, hustle, and a lot of winging it.

I learned how to start a project, create momentum, and create a great-looking outcome, but that wasn’t always enough for financial success.

For years, I did not understand that without a target, a goal is difficult to reach; now, as a CPA, I see entrepreneurs suffer from the same misunderstanding and have decided to help them.

Your Northstar number is the revenue your business must generate to fulfill your lifestyle needs as an owner.

Not your fantasy life. Not someday. The life you are living right now.

You need to know what your business has to produce for your life to work. Everything else is downstream of that.

Large companies build entire departments around this kind of target. Small businesses skip it, assuming they don’t need it. They do. The only difference is that in your business, the stakeholders aren’t strangers on Wall Street — they’re you, your family, and everyone depending on the business to work.

Here is the part that catches people off guard: you cannot find your Northstar by looking at your business.

You find it by looking at your life first. What do you actually need to earn? What are you spending? What are you trying to save? Until those numbers are clear, any revenue target you set is a guess dressed up as a plan.

The calculation has four inputs:

That last one is where the surprise lives. Margins run tighter than most owners assume: restaurants usually 3 to 10 percent, retail 5 to 15 percent. The gap between assumed margin and real margin is where a lot of hard work quietly disappears.

Say your monthly personal obligations total $7,850 after taxes. With a 20 percent tax buffer and a 20 percent profit margin, your business needs to generate roughly $588,750 a year — about $49,000 a month — to sustain the life you already have.

I’ve sat across from business owners who thought they needed to make $150,000 a year. Then we ran the math together, and the room got very quiet.

Without a Northstar, owners set prices out of fear. They confuse revenue with income. They chase new offers before maximizing what they already have. Every one of those decisions feels like forward motion, and none of them are anchored to anything.

Strategy changes that. It gives hustle a job to do.

Once you have the number, bookkeeping stops being a tax chore and becomes a navigation system. Your books tell you whether you’re on course. Quarterly check-ins are where you course-correct — adjusting pricing, cutting expenses, or doubling down on what’s working.

Waiting until tax season to look means your decisions are already six to twelve months old. That isn’t strategy. That’s a rearview mirror.

The business owners I work with who know their Northstar make different decisions than the ones who don’t. Not because they’re smarter, but because they have something to measure against.

They make decisions with the Northstar front of mind, which allows them to avoid jobs or customers that don’t align with their business;  establish pricing with confidence; and start monitoring the business in terms of the Northstar, which creates their own measure of success.

When you don’t know your Northstar, you lack direction and hope for success that has never been defined.

Luckily, you don’t need a corporate finance department to calculate your Northstar.

You need a system, and the discipline to revisit regularly; then use that number as a basis for setting prices, buying inventory, spending on advertising, or hiring new staff.

Hustling gets you moving;  the Northstar number helps you arrive. Don’t wait to find yours.

I’m running a free online workshop on Wednesday, September 16 at 12:00 PM ET: a plain-language walk-through of finding your own Northstar number, with live Q&A.

Register now, bring your own numbers, and save your seat. Registered attendees get a private recording link afterward.

The revenue your business must generate to fulfill your lifestyle needs as the owner, accounting for living expenses, savings goals, taxes, and your profit margin. It turns “I need to make more money” into a specific, measurable target.

Start by adding up your monthly living expenses and savings goals, apply a tax buffer, then divide by your profit margin percentage. The result is the annual revenue your business must generate for your life to work.

Routine check-ins are how you catch problems early and stay on course. At a minimum, once a quarter is a good practice.  Too many small business owners neglect to review their finances until tax season, which means they’re reviewing data that is 6 to 12 months old and doesn’t hold as much value for decision-making.