What Most Business Owners are Getting Wrong About Profits
According to GAAP, or Generally Accepted Accounting Principles, the proper formula for determining a business’s profit is to take your total revenue, and then subtract your expenses, leaving you with your profit. In other words:
Sales – Expenses = Profit
This formula is widely accepted as the end-all-be-all for calculating profits. While it seems simple, logical, and clear – it is also a lie. The formula, while logically accurate, is not exactly optimal. Furthermore, if you’re struggling to achieve a reasonable profit in your business – then this model is not for you.
This might come as a surprise to you, however, the main drawback of the traditional profit model is that it doesn’t account for human behavior.
Don’t Become Another Statistic
This puts business owners in a perpetual cycle where they struggle to make ends meet as entrepreneurs. In the end, they succumb to the pressure and end up closing their doors. According to the US Bureau of Labor Statistics, a whopping 20% of small businesses close their doors the first year. Once you factor in the costs and the sacrifices associated with opening for business – this is catastrophic!
Did you know that 83% of small businesses live paycheck to paycheck? Let’s change that NOW!