Revenue is a Fake, Vanity Metric. Worry About Profit Instead | Episode 023

Ever noticed how all of the gurus, competitors, or your peers only seem to brag about their revenue numbers? Does it have you feeling like you're not as successful or that you should be doing more?

You might want to pay closer attention to what they're saying -- you might end up feeling better about yourself.

Revenue is one of those numbers that are easy to inflate. If someone spends $1m in ads and makes $10k back, their revenue is $1.01m. That seems like a lot of money until you realize the owner of that company only took home $10k... and that's assuming there were no other expenses. On top of that, they incurred a huge liability! $1m in ad spend!

In this episode, we discuss how the only thing you should be concerned about at the end of the day is how profitable your company is. Revenue means nothing if it's not generating a healthy profit margin. Profit margins are what keep businesses around for the long haul.

Smart people don't buy businesses that have high revenue numbers, they buy businesses that are profitable.

If you're an agency or consultant and don't in inventory or ad spend as much, your profitability comes from your labor hours. Pay attention to how much revenue you're bringing in divided by how many labor hours you're attributing. You may not be as profitable as you think.

If you like tangents, you'll love this episode!

If you don't... well... at least it's a shorter episode...

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