Business Best Practices, Money Mindset
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Profit is the most important number in your business. Followers, sales, email subscribers….all important numbers. But without profit, you don’t even have a business. You have a hobby. Businesses that make profit stay open, businesses with no profit eventually shut down.
So….what exactly is profit and why do we need it?
While sales and profit seem like similar financial terms they’re really quite different. Sales or Revenue is the money you bring in from clients.
Sell a $1,000 coaching package? Your Sales are $1,000, but you’ve also got expenses. What you have left after you pay for all the things that make your business run is your profit.
Sales are the top line before expenses, profit is the bottom line, after expenses. A $1,000 sale is great, but if it costs you $990 to make it then maybe things aren’t going as well as they might seem.
Sales are fantastic, they are the lifeblood of a business. But those sales don’t go straight into your pocket. You’ve got payment processing fees, software costs, ad spend, and taxes. That revenue has some serious work to do. Focusing on profit instead of sales helps you to see both sides of the equation. You can work on increasing sales and decreasing costs so that you can take more money home to your family.
(NOTE: Before you can know your profit you’ve got to be keeping up with your bookkeeping. Download the Ultimate Checklist to Keep Your Bookkeeping Simple now and finally get caught up)
What is a business without profits? It’s called out-of-business. You have to be able to cover your business expenses, pay your taxes, save for emergencies and then have something left over. Without these things, you’ll be out of business pretty quick. Profit is vital.
At the end of the day, you’re in business to make money. You have to support your family and yourself, and that matters more than anything else. Never feel guilty for making a profit, because you’re not just making money, you’re providing a needed service that changes people's lives. And without profit you don’t have a business, you can’t keep going, and you can’t help others.
(NOTE: Before you can know your profit you’ve got to be keeping up with your bookkeeping. Download the Ultimate Checklist to Keep Your Bookkeeping Simple now and finally get caught up)
Profit matters. Your business matters. You matter. Keep kicking butt and taking names, you’re changing the world along the way.
Want more? Learn:
--How to calculate your paycheck
--The Key to Money. Mindset You Need to Know
--Money and Business: 3 Things to Stop Feeling Guilty About Now
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