The Bottom Line: Revenues vs Profits

One of the missing conversations in a lot of entrepreneurial circles is Profit.  It’s almost a dirty word, Profit.  Yes, I said it again. And it needs to come out of the dark closet of “things we don’t discuss” to see the light of day, particularly if we plan to succeed as entrepreneurs.  This is particularly true in healing and conscious entrepreneurial circles, and it is certianly not exclusive to them. 

Money itself is already something many people are not comfortable discussing.  Often people hesitate to say, "I closed a $140,000 deal today."  A big deal – certainly, that can be said and congratulated – however, a price tag? Not mentioned so often.  There’s a bit more latitude allowed in marketing circles.  Having a six figure coaching program or a five figure product launch or a seven figure business is fine. However, in these contexts still rarely are actual figures mentioned.  Even then on the rare occasions when actual figures are mentioned it is always revenue numbers, not profit. 

Just a reminder: revenue and profit are not the same thing. When a marketing guru is on stage telling you about their seven figure business, they are talking about revenues.  Revenues are the total amount of money received from your clients.  Profits include only what is left after expenses.  Thus the saying “The Bottom Line”. Profit is that number at the bottom of your P&L statements showing what you get to keep when all the bills are paid.  As a group, we stubbornly refuse to discuss this number.  And it is the key to success in your business.  Why?

What you focus on determines where your results are likely to be found.  If you focus your time on marketing, the likely outcome is new clients.  If you focus your energy on revenues, you are likely to find new streams of income.  If you focus on reducing your expenses, you are likely to find ways of saving money.  So if you focus on your profits, you’re likely to make more money.  That’s why having a system to deal with the numbers of your business is so critical, because it gives you the ability to chose your focus in your business most effectively.  It allows you to measure the different components of your business, just as you would measure the ingredients for a recipe.  And you will discover the recipe for your financial success.

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"Atim Kavi, MBA is a money expert with over twenty years experience in accounting, management and consulting. She has managed money for multi-million dollar corporations and consulted with Fortune 500 companies as well as coaching individuals. At MoneyCourage.com, Atim coaches entrepreneurs on money management, business system design and automation to help them "Make More. Work Less".  To learn more, visit MoneyCourage.com to get your complimentary ebook The Money Secrets of Wildly Successful Women Entrepreneurs, as well as a free subscription to the Money Freedom ezine."