Maybe it just got put towards staff expenses?
Maybe it got buried amongst all your material and goods costs?
Maybe it’s just one of the “necessary evils” of a growing business?
Whatever it is, there should be a lot more left over in your pocket - but there isn’t.
So what do you do?
You just try and sell more stuff.
You market your brains out, trying to get more business through the door (and profit into your pocket).
You may even go on a cost-cutting spree, sacrificing things you actually do need just to try and bump up those numbers on the bottom line of your balance sheet.
And yet, despite your best efforts, you barely seem to be any better off than before.
(And let me tell you, there’s nothing more demoralizing than going into business with the allure of “unlimited profit potential”...only to realize that you’re taking home fractionally more than you might do at a typical 9-5 job...)
But I do have some good news:
It’s NOT your fault.
But not the kind of “Hey, it’s not your fault!” way that internet marketers love to say so they can butter you up before they sell you something...
Like, literally - this is NOT your fault.
It’s highly likely you (or whoever does your accounts) is following a system called the GAAP - the Generally Accepted Accounting Principles.
You take your revenue, then subtract the Cost of Goods Sold, operating expenses, and any other outgoings you need to factor in.
Then you account for things like taxes, depreciation, amortization and the rest.
Then finally, at the bottom of your income statement, you have the leftovers that we affectionately refer to as “Profit.”
But here’s the thing: