If there's one thing I've learned from working with over 150 startups and small businesses as a FracCFO and Finance instructor, it's this:

Every company is unique

But they also ALL have one thing in common:

For every company (service businesses, product businesses, small businesses, large, local, international, high tech, mom & pop, and every business in between):

Their Profit is equal to their Revenues, minus their Costs.

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In other words,

Profit = Revenues - Costs.

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Here's why that's so powerful:

For any action you are about to take in your business, every decision, every dollar spent,

That action belongs somewhere along this equation:

• Trying to set a sales goal? That's a Revenue target that will determine your Profit, all else being equal.
• Hiring someone? That's an increase in Cost. It also potentially unlocks more Revenue if they're a billable resource.
• Thinking about rolling out a new product? Chances are, you'll incur some initial Cost for its development, but then hopefully convert new sales that will result in Revenue growth.
• Going for fundraising? The money you get isn't actually Revenue, so it has no initial positive impact on your bottom line. There will likely be Costs associated with preparing to fundraise. You're hoping to see higher long-term Revenue from being able to take on higher Costs for marketing, product development, and hiring. But that bigger spend also means Profit could get squeezed for a long time.

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If you can connect your actions in the business to impact in the profit equation,

Then, you'll never be flying blind.

Instead, you'll be operating with absolute clarity

On what actions or decisions will result in your business thriving.

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You'll be doing math-based company management:

Witnessing the control that comes from knowing

How what you're doing

Is creating your financial future.

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Your Daily CFO,

Lauren

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