{"id":2073,"date":"2026-07-01T15:36:52","date_gmt":"2026-07-01T19:36:52","guid":{"rendered":"https:\/\/www.heywardcpa.com\/blog\/2026\/07\/01\/5-steps-to-find-your-northstar-number-easy-guide-for-growth-minded-entrepreneurs\/"},"modified":"2026-09-09T22:18:18","modified_gmt":"2026-09-10T02:18:18","slug":"5-steps-to-find-your-northstar-number-easy-guide-for-growth-minded-entrepreneurs","status":"publish","type":"post","link":"https:\/\/www.heywardcpa.com\/blog\/2026\/07\/01\/5-steps-to-find-your-northstar-number-easy-guide-for-growth-minded-entrepreneurs\/","title":{"rendered":"5 Steps to Find Your Northstar Number (Easy Guide for Growth-Minded Entrepreneurs)"},"content":{"rendered":"
At Heyward CPA, we talk to growth-minded entrepreneurs every day. Whether you\u2019re running a thriving law firm, managing a busy daycare, or building a consulting practice, there\u2019s one question most owners can\u2019t answer on the spot:<\/div>\n
How much does this business actually need to make?<\/div>\n
Not \u201cmore than last year.\u201d Not a round number that sounds impressive. The specific figure your business has to produce for your life to work.<\/div>\n
That figure is your Northstar Number. Here\u2019s how to find it.<\/div>\n

<\/h2>\n

What Exactly Is a Northstar Number?<\/h2>\n
Your Northstar Number is the revenue your business must generate to fulfill your lifestyle needs as the owner.<\/div>\n
That\u2019s it. It isn\u2019t a growth metric, an engagement score, or a customer-behavior indicator. If you\u2019ve read about \u201cnorth star metrics\u201d in a startup context, that\u2019s a different concept built for venture-backed software companies. Useful in its place but not the number a small business owner needs.<\/div>\n
You need to know what your business must produce to survive. Every other decision pricing, hiring, whether to take on that client gets easier once that number exists.<\/p>\n<\/div>\n

Why Revenue Alone Tells You Nothing<\/h2>\n
Gross revenue on its own is a vanity metric. You can post $1M in revenue against $1.1M in expenses. At that point, you aren\u2019t a business owner; you\u2019re a high-stress volunteer for your vendors.<\/div>\n
The Northstar isn\u2019t revenue in isolation. It\u2019s a revenue target calibrated to your actual life and your actual margin. That\u2019s what makes it a sanity number instead of an ego number.<\/p>\n<\/div>\n

Step 1: Map Your Real Personal Expenses<\/h2>\n
Here\u2019s what catches people off guard: you don\u2019t find your Northstar by looking at your business. You find it by looking at your life first.<\/div>\n
The Step: List your monthly living costs honestly: housing, utilities, insurance, food, transportation, childcare, debt payments, subscriptions all of it. Most owners underestimate this by 20 to 30 percent, usually on food and recurring charges they\u2019ve stopped noticing.<\/p>\n<\/div>\n

Step 2: Add Your Savings and Income Goals<\/h2>\n
Covering your bills isn\u2019t the same as building something. A Northstar that only funds survival will keep you exactly where you are.<\/div>\n
The Step: Add what you want to set aside: an emergency fund, retirement, college, or a real vacation. If you\u2019re currently saving nothing, this step is where that changes. Add the goal, not the current reality.<\/p>\n<\/div>\n

Step 3: Build In a Tax Buffer<\/h2>\n
Self-employed income doesn\u2019t arrive taxed. Nobody withholds on your behalf, and the bill is bigger than most first-time owners expect once self-employment tax is included.<\/div>\n
The Step: Apply a tax buffer to your total from Steps 1 and 2. The right percentage depends on your entity, your state, and your deductions; this is worth a conversation with us rather than a guess, but plan on it being substantial.<\/p>\n<\/div>\n

Step 4: Find Your Actual Profit Margin<\/h2>\n
This is where the surprise usually lives. Margins run tighter than owners assume; for instance, restaurants commonly land between 3 and 10 percent, retail between 5 and 15 percent. The gap between assumed margin and real margin is where a lot of hard work quietly disappears.<\/div>\n
The Step: Pull your last twelve months. Divide net profit by gross revenue. That percentage, not the one you hope for, is what goes into the calculation. If your books aren\u2019t clean enough to answer this, that\u2019s the first problem to solve.<\/p>\n<\/div>\n

Step 5: Reverse-Engineer the Revenue Target<\/h2>\n
Now the math does the work. Take your annual personal requirements, expenses, savings, and tax buffer and divide by your profit margin percentage.<\/div>\n
Say your monthly 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.<\/div>\n
We\u2019ve run this with owners who were confident they needed $150,000 a year. The room usually gets very quiet.<\/div>\n
The Step: Run your own numbers. Then check them against what your business is actually producing.<\/div>\n
If you\u2019d rather not do the arithmetic by hand, our Northstar Calculator walks the same five steps and gives you the figure.<\/p>\n<\/div>\n

Tracking It: The BYOB Model<\/h2>\n
Finding the number is half the work. Tracking it is where the growth happens.<\/div>\n
Traditionally, you\u2019d outsource your bookkeeping and wait for a month-end report. For a growth-minded owner, waiting 30 days to learn whether you\u2019re on pace is too slow.<\/div>\n
That\u2019s why we built the BYOB (Be Your Own Bookkeeper) model a done-with-you approach where you stay close to your numbers, and we stay involved:<\/div>\n