Not All Revenue Is The Same
Every dollar your company makes isn’t the same. Sometimes the dollar you earn cost you seventy five cents to make. Other times it costs you ten cents. And more often than you think, it costs you a dollar ten, or a buck twenty or even two bucks.
It’s time that you get very clear on what it costs you to earn your money, because all dollars are not created equally.
Your company’s success depends on your understanding of this.
You company’s profit depends on your mastery of this.
Too many businesses make plans on the basis of gross income, rather than net. This is why cash-flow problems are such a major reason that businesses go bankrupt.
So, so true. And even though I know this, I fall back into the trap. That is why the PFA method helps me so much. It lets me look at my bank account and spend based on what is in there, since the profits and expense and such are already out.