EP242 | The Relationship Between Revenue And Profit

We're digging into some basic business finance that's super important: profit and revenue. Sounds simple, but it's easy to misunderstand, especially when you're building your own cash practice. Think of solid financial understanding like a killer offensive line in football. They don't score touchdowns, but they stop bad things from happening. Same in business. Knowing your numbers, the difference between top-line (gross revenue) and bottom-line (net profit), is your bedrock. We'll talk about how your profit picture changes as you scale, why a $250k solo gig is a profitable job but not a business, and the trade-offs when you hire to build something truly passive and sellable. It's about understanding what kind of business you want to build.

🔑 Key Takeaways:

• Gross vs. Net: Gross revenue is your top-line income (all the money that comes in). Net profit is your bottom-line (what's left after ALL expenses, including paying yourself). Profit is what truly matters.
• The Profitability Shift: When you're solo, your profit margins can be super high. When you hire and scale, your gross revenue goes up, but your net profit percentage typically goes down per dollar because you're paying staff. However, this can lead to passive income.
• Job vs. Business: If your clinic makes zero dollars when you're on vacation for two weeks, you have a highly profitable job, not a business. A true business has systems and people that allow it to generate revenue without you doing all the work.
• Build for Safety and Scale: Scaling past yourself by hiring staff reduces personal profit margins but creates a more stable, safer, and potentially sellable asset. It moves you from active to passive revenue.

🧠 Pro Tip: Decide what kind of business you want. A high-profit solo "lifestyle" business is fine if that's your intentional choice. But if you want something that can run without you, or that you can sell one day, you need to build systems and a team, understanding the impact on your immediate profit margins for long term gain and stability.

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