Work From Anywhere DIGITAL NOMAD https://www.digitalnomad.com/ Christian Martin Revenue vs Profit: Which Is More Important? Some people in the internet marketing industry talk about their revenues as if that’s the end, all Beale. And if you don’t know, revenue is top line, what comes into the business? That means actual cash that came into the business. And sometimes people even report the sales that were made, including accounts receivable, meaning cash that hasn’t been collected yet as revenue where other people will say profit is all that matters. I don’t care what your revenue is at all. So how do you know which one matters revenue or profit or both, but like most things it’s somewhere in the middle. So today we’re going to break down. What’s important about each one and why profit is not the only thing that matters. Here we go. Is Profit Really King? We have to have revenues to support the operations of a business. And oftentimes they’re taking some of that profit and we are investing back into our product. We’re making things better. We’re building systems and we’re gearing up to scale. So we’ve had the comparison of these two businesses, but let’s take things further. Let’s say that revenue in the business, number one is almost the same as profit with the solo preneur. They probably cannot scale very much at all next month. They’re probably max out, but we take that business with a hundred K in revenue, 20 Cain profit. Revenue Equals Investment So does revenue matter? Of course it does more than most people think this is how you build an actual, scalable business versus just building a job for yourself. So when everybody says profit is the only thing that matters, it matters what order we’re doing things right. When we’re scaling revenue is going to be more important. And we’re going to cut into our profit margins. You cannot scale without cutting those margins and giving away some of that money. But what you have to realize is a small piece of a massive pie is so much better than the whole pie that is very, very small and could go away at any minute, but we can take things even a step further. Scaling Requires Revenue Not Profit He also gets to provide a paycheck for people and a sense of purpose and training and build out a team and develop his people and get that sense of fulfillment and create bigger opportunities for him or herself. So do you see how important it is to not just focus on profit, but focus on revenue and then put some of that money back into the business. Now, famous example of this is Amazon has built one of the most valuable companies in the world that provides value to pretty much every single person you can see and hundreds of thousands of jobs, they didn’t make a profit for 20 years because they just put it all back in. Start with Revenue, End with Profit He also gets to provide a paycheck for people and a sense of purpose and training and build out a team and develop his people and get that sense of fulfillment and create bigger opportunities for him or herself. So do you see how important it is to not just focus on profit, but focus on revenue and then put some of that money back into the business. Now, famous example of this is Amazon has built one of the most valuable companies in the world that provides value to pretty much every single person you can see and hundreds of thousands of jobs, they didn’t make a profit for 20 years because they just put it all back in. Start with Revenue, End with Profit Thank You For Attention DIGITAL NOMAD https://www.digitalnomad.com/