Focusing on revenue is dangerous. Here’s why…
Yes, we all love to focus on how much revenue we are bringing into our business.
We set financial goals based on how much we bring in.
But here is why focusing on revenue is dangerous…
Because revenue doesn’t give enough of the whole picture.
You can have a business making millions and it’s going backwards.
When it comes to getting ahead financially, it’s not purely about how much we make.
Yet this is where our focus naturally goes.
Making more doesn’t always leave us with more money.
I’ve had plenty of small business owners come to me frustrated because even when their client base is growing, it doesn’t feel like they are getting ahead financially.
Yeah, that’s because they aren’t!
I remember the first client who came to me with this issue many years ago. He was making over a million dollars in his business and was feeling so frustrated because money was tighter making over a million than when he was making significantly less.
In these situations, the more clients the business gets, the more they go backwards.
Now this isn’t true for all businesses, but it is important for all businesses to be aware of because it is an easy trap to fall into.
More revenue does not always mean you are better off.
We can think all our problems will be solved if we just make an extra $10k, $30k, $50k…
But we must make sure that the whole picture works:
- How are your profit margins?
- What are your variable expenses per client?
- Where are the inefficiencies that need to be sorted?
- How much time are you really spending serving a client?
- Are you able to handle scaling up and serving more clients?
- What extra costs are you going to incur when the revenue grows?
These are all great questions to investigate if you are always focusing on revenue and finding there still isn’t enough money left over.
If you want help to get your business ahead, then reach out and let’s chat about how to make that happen.