WHY MORE REVENUE DOESN’T FIX EVERYTHING

Raise your hand if you’re a business owner who likes money! The truth is, if you’re not making money, you don’t have a business, right? As a business owner, you might think more money is the answer to revive your flatlining business, but there might just be a bigger problem at play that’s been left undiagnosed. Well, The Biz Doctor is in to help you get your head above water, and I’m pulling back the curtain to uncover why revenue doesn’t fix everything and how losing it actually signals a much bigger problem! 

Diagnosing the root cause of your business and bringing your business back into a healthy flow is my specialty, and so today, we’re talking all about the various aspects of revenue. Diving into profitability and those leaky buckets within your business, we’re taking a closer look at why a seven-figure business doesn’t automatically equal stability, why revenue loss is a symptom of a larger problem, and the connection between revenue and your customer’s trust in your process and product. 

UNDERSTANDING REVENUE

I’m going to start with a blunt statement, as business owners, we like money, but we don’t understand revenue. We’re quick to advertise those seven-figure launch successes, but the real question we should be asking is how much did we spend to make that? What did we actually keep, gross vs. net, because actual wealth equals value x leverage. We covered leverage in our last blog post, which you can read HERE (insert S1 E1 blog post link). 

So let’s break this equation down a bit further. Value translates to trust because when people trust you, they give you their money, which is how you get the outcome of revenue. When you create flow – that’s from leverage, and the direct outcome is profit! Revenue becomes a lagging metric because it’s coming in after the fact. So if you’re judging the health of your business solely on revenue that’s coming in, you’re missing the operational components of profitability, cash flow, etc. 

Think of it this way…revenue is vanity, profit is sanity, but cash is king! Without having an accurate assessment of cash flow, which can’t be determined from reading revenue reports, your growing business could be headed for disaster without you even knowing. 

Without a purposeful focus on measuring and growing cash as well as profits, your business runs the risk of running short. Yes, we want to make money, and yes, we want to make an impact. However, if you’re not passionate about your bottom line at the end of the day when something happens outside of your control, you won’t have the cash flow and profitability to have a really healthy sustainable business. 

CONSISTENCY IS KEY

While I love operations, the fact is most business owners don’t. Why? Well, if we’re being honest – it’s not exactly sexy and frankly can even seem kind of boring, but building your business is a marathon, not a sprint. The initial phase of your business might be more like a triathlon, but once you hit that seven-figure mark, consistency is key as you dial up and dial in on how to make your business more profitable and have an even bigger impact. The leap from a good business to a great business is huge, but operating in that two-millimeter space between great and extraordinary is where the magic happens, and this is where I come in – to bridge the gap from where your business is to where you want it to be.

Strategic support and consulting make all the difference. Bringing someone in who can look for ways to operationally improve your business is not only beneficial but allows you to see exactly where you’re going, identifying any blind spots along the way. Because, as a business owner, clarity is what you need to refine your operations. 

Taking that hard look at your business and whether or not it’s set up to support your goals and expectations is critical. If you’re not set up for success, both from an operational and team standpoint, you start to resent it, ultimately becoming a prisoner to it. Knowing what needs to change is what moves a business that has plateaued to a business that is back on track.

GROWING A BUSINESS WITHOUT MAKING IT GO BACKWARDS

I’m extremely passionate about looking at how you can grow your business without making it go backwards, and a lot of that has to do with looking at the right metrics and asking the right questions. It’s understanding the reward you’re after and ‘the why’ before implementing change. Aimlessly adding more personnel, more technology, and more processes to your business puts a huge strain on operations, revenue, profitability, and time, creating friction as you grow. 

The truth is as you scale your business things should get simpler, not more complex. It’s important to ask questions like “Why are we adding that?”, “How is this getting us closer to our goal?” or “Does this technology or team structure serve us well?” 

Focus on building a proactive business vs. a reactive business. If you’re making business decisions by measuring your revenue only, you run the risk of ending up in a tight spot. Whereas measuring the metrics of operations, flow, and profitability allow you to see that maybe it’s not the best time to put that decision into play. 

THE TAKEAWAY

Knowing what’s really going on inside your business is incredibly impactful when it comes to the lifeblood of your business and is exactly why revenue doesn’t fix everything. So if you’re judging the health of your business solely on the lagging metric of revenue, you’re missing the operational components of profitability, and cash flow needed to have a healthy and sustainable business. 

Ready to do a diagnostic deep dive with me and my team? Let us help you diagnose the who, what, when, and how to tune up your business operations. We’re here to help you get to the root of what’s really holding you and your business back from the profitability, impact, and sustainable growth you’re after. So head over to goldenkeypartnership.com – to get your business running like a well-oiled machine that can thrive.

Don’t forget to tune into your newest favorite podcast, The Biz Doctor HERE, where you’ll find honest insights into what it takes to grow, operate, and maintain a successful business that scales sustainably and have a beautiful life. Consider it a true-to-life, authentic, no-BS approach to business operations, high-performing teams, and leadership! Give season #1 episode #2 a listen for the full “Why Revenue Isn’t Everything” experience!