Keep What You Earn

A Deep Dive into Your Profitability Strategy

Jul 14, 2025
Discover the crucial differences between operating profit and net profit for your business. Learn how to measure these metrics effectively as a percentage of sales. Shannon shares actionable tips to balance acquisition costs and operating expenses, ensuring sustained profitability. The discussion emphasizes the importance of regular profit assessments akin to nutritional planning for your finances. Tune in for insights on budgeting and strategizing your profit to avoid common pitfalls that can erode your earnings.
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INSIGHT

Understanding Operating Profit

  • Operating profit is your net profit after covering the costs to run your business.
  • It fluctuates monthly and is more fluid than core offer profit, so monitor it regularly.
ADVICE

Measure Operating Profit by Sales Percentage

  • Always analyze operating profit as a percentage of sales, not just the raw number.
  • This helps prevent skewed perceptions of profitability when sales volume changes.
ADVICE

Budget by Expense Categories

  • Categorize expenses into acquisition costs, operating costs, and fulfillment costs to clarify budgeting.
  • Use these categories to set healthy budget ranges and monitor your profit margins regularly.
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