"Okay, but what's your time worth?"
I sat in the office of my financial guru last week as he grilled me about the profitability of the Boss Lady Bash.
You see, I was having trouble deciding how to package the Boss Lady Bash as a product or a model that I could help implement in other cities like Bozeman around the country. I had come to his office to discuss scalability, product market, and all the other amorphous business things that I could think of.
What I wasn't expecting was him to drill into the details of the actual event itself. To ask me about how much I spent, how much I made, and what the profitability was.
I didn't even know what profitability means.
After he had thoroughly taken me down a few notches he told me one thing:
"Don't forget why you're here. You're here to make money. And until you make money, having all the dreams for this next year isn't going to get you anywhere."
The worst part was that...he was right.
Therein lies the issue.
As a business owner we are here primarily to make money. To give other people something that they want in exchange for money.
And if a lot of people want said thing? You need to charge for it appropriately.
The other thing that he said to me was that the word "revenue" was bullshit.
"I don't care how much revenue you pull in. How much is it costing you? That's what I care about."
Because revenue is a myth. It's profit that we care about. And profit is ONLY taken into account when you factor in your time. So if you sell ten products for $100, your revenue is $1,000.
But if you spent 20 hours creating it and your hourly rate is $50/hour? Or you spent 30 hours creating it and your hourly rate is $50/hour?
You didn't make a profit.
You got paid for your time.
But your product isn't profitable.
And, by the tenets of being a serious business owner, you need to stop selling it.
(I know how you're feeling right now. I wanted to protest this logic very deeply.)
But the truth is that, creating equity, creating a profitable company, one that has a clear exit or a clear mission, is why you're here. You're not here to play small and to just get by. You're here to build something, to be free, to have a reserve in the bank for a rainy day trip to France (or whatever freedom means to you).
So don't forget why you're here.
A GIFT FOR YOU!
I'm launching a special deal for all members of my list this Friday in honor of my 30th birthday. Have you ever wanted to work with me, but are unsure what you need? Friday's announcement will help with that. But only if you're on the list!