204 Pinks and Blues Questions From The Nation! Being Profitable
I\u2019m your host Trace Blackmore and in today\u2019s\xa0episode, I answer your question in this\xa0Pinks and Blues episode that is all about PROFIT.
As many of you know,\xa0my favorite thing about this industry is solving my clients\u2019 problems. Early in my career I didn\u2019t want to take the time to look at my business' numbers, but once I understood how to look at the data, I could make better decisions, which increased my profits, and that\xa0increase\xa0in profit made my business better.
Everyone knows that profit is important.\xa0But how do you know what you\u2019re\xa0really\xa0making when you service that new account of yours?
In today\u2019s\xa0episode,\xa0I\u2019m answering your questions and we\u2019re going to walkthrough:
-
- What is Profit, Revenue, Gross Profit, Gross Margin, Operating Profit, Net Profit, and Labor Costs
- How to know if you are making a profit
- How to see the big picture so you can make better decisions for your company
- The secret thing every business owner needs to share with their employees to increase the company\u2019s profit
\xa0
Bottom line: \xa0When you unpack the real cost\xa0of what it is that you do, you can truly see where you should be spending your time.
Your roadside friend, as you travel from client to client.
-Trace
\xa0
Timestamps:\xa0\xa0
Questions from the\xa0Nation: What do revenue, gross profit, and margin mean?\xa0How can we calculate that\xa0manually\xa0if our company doesn\u2019t have a\xa0reporting system?\xa0[3:58]
When you run your own business, you are responsible for every piece of that business\xa0[6:25]
Figuring out Gross Margin\xa0[9:30]
Looking at Operating Expenses\xa0and Net Profit [11:50]
CTA:\xa0Look at your data\xa0[14:09]
Challenge for business owners: share your financial data with your team [16:26]
Business lessons learned from my Mastermind and\xa0Business Coach [17:36]
James\u2019 Challenge: \u201cInstall or change out corrosion coupons.\u201d\xa0[23:38]
\xa0
Quotes:\xa0
\u201cIf you understand the data, you\u2019ll be able to make better decisions.\u201d\xa0- Trace Blackmore
\u201cWhen you run your own business, you have to be\xa0responsible for everything in that business.\u201d - Trace Blackmore
\u201cGross Margin: A company\u2019s net revenue minus the cost of goods.\u201d\xa0- Trace Blackmore
\u201cMost people don\u2019t think about operating expenses.\u201d\xa0- Trace Blackmore
\u201cOnce you subtract Operating\xa0Expenses from the Gross\xa0Profit what you have left is the Net Profit.\u201d
\u201cMany of us do not know what the actual profit is on an account we are\xa0service.\u201d\xa0-Trace Blackmore
\u201cProfit is all that matters.\u201d - Trace Blackmore
\u201cMany of us do not know what the actual profit is on an account we are servicing.\u201d - Trace Blackmore
\u201cHow much is your time worth and are you using it at its highest and best value.\u201d -Trace Blackmore
\u201cWhen you unpack the real cost of what we do, you can truly see where you should be spending your time.\u201d - Trace Blackmore
\u201cI think if you ask any CFO worth anything, they will tell you the only number that matters is profit.\u201d\xa0- Trace Blackmore
\u201cProfit is all that matters.\u201d\xa0- Trace Blackmore
\u201cProfit allows us to grow the company and make it better.\u201d\xa0- Trace Blackmore
\xa0
Links Mentioned:\xa0
AWT (Association of Water Technologies)
\xa0
Books Mentioned:\xa0
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It by Michael E. Gerber\xa0
Financial Intelligence, A Managers Guide to Knowing What the Numbers Really Mean by Berman and Knight\xa0
Accounting for Non-Accountants by Wayne A. Label
\xa0