If you’re not earning the profit you want to, it could be because of one of these reasons…

  • Your sales figures aren’t high enough
  • You don’t put any attention towards knowing your profit
  • You’re bleeding expenses

When it comes to creating a profitable business (not just one that pays everyone else and not you!) then being purposeful is essential.

And it’s not just about earning more income.

Because there’s no point in earning more if there’s no profit as a result.

So how do you know that your business is profitable?

Traditionally, we’re taught to figure out our profit we simply take our income and subtract our expenses.

The problem I have with this thinking is that it’s easy to spend to match our income.

And there’s never any money left over.

I prefer to consider the formula differently:


This makes us more purposeful when it comes to setting our income targets.

And if your business is leaking money, then it’s time to get intentional.

The way you do this is by high-quality questions about your expenses.

Go through your Profit and Loss statement for the last 6 months line by line and ask yourself:

  • Was this spending planned?
  • If not, for what purpose am I investing my money into this expense?
  • How is this expense going to deliver value to me and/or provide a return on investment?

Making it a habit to regularly review your expenses, your pricing and your profit targets will help you to earn the profit you deserve.

Because in the wise words of Mike Michalowicz (the guy who wrote Profit First):

“Profit is not an event. It’s a habit.”

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