Million Dollar Micro Business

22Manage your money: cash flow vs profit

Last year I was listening to a podcast of a course creator I'd been following (let's call her Renee), who was talking about her most recent course launch, which made $300 000. Wowsers, an impressive number by anyone's standards. But in business, top-line revenue doesn't mean anything if you're not keeping a careful watch on your profit levels and maintaining healthy, sustainable margins. From that $300 000, $30 000 went straight out in taxes, $170 000 on Facebook ads, $20 000 on extra software (she wasn't using Kajabi) and $20 000 on customer service support for all the extra load. That left $60 000 profit, which was still crazily impressive for a launch, a return that anyone would be grateful for, but it didn't reflect the work Renee had put in and it wasn't sustainable. That $60 000 profit on a $297 product meant more than 1000 new clients, a lot to support on an ongoing basis. Renee deserved way more profit for serving so many people.

I had a client who did content marketing and a webinar launch to her client base, selling her $997 course to 72 new clients, to produce revenue of $71 784 from the launch. Nowhere near Renee's impressive-sounding $300k launch, but she had to pay taxes of just $7180 and nothing more. She made slightly more profit than Renee made on her big launch. Not only that, but who do you think has the easier business to run — the one serving a thousand people or the one serving 72?

Remember, revenue is for vanity. ...