Revenue is Vanity. Profit is Survival.

Hey founders,

90% of entrepreneurs are missing big time on this one:

Just because a business makes a million dollars… doesn’t mean the owner is rich.

Most first-time entrepreneurs chase revenue. It’s the flashy number that gets attention. But what actually matters is profit (this is what keeps the lights on and creates real freedom).

This week, we’re going back to the basics of profit: 

What it is, why it matters, and how to increase it.

Most founders don’t understand profit. That’s a problem.

Ask 10 new founders what their profit margin is… most can’t tell you.

They might know revenue. 

They might even know the costs. 

But profit? 

That’s usually an afterthought.

So let’s walk through a simple example:

Let’s say your business does $1 million in revenue:

• 30% goes to cost of goods sold → $300K

• Operating expenses take another $500K

• Taxes take about 25% of what’s left → $50K

What you actually keep: $150K (a 15% margin)

And from that $150K:

• You pay yourself.  (arguable if this is truly profit)

• You build a reserve. 

• You reinvest into the business.

• You make strategic hires.

Suddenly that million doesn’t feel so big.

The takeaway: Revenue tells you how fast you’re going.

Profit tells you if the engine is built to last.

Profit gives you options (and higher valuations)

Let’s say you want to build a company you can sell for $5M.

Most businesses are valued on a multiple of profit, not revenue. So if you're aiming for a 5x multiple, you’ll need $1 million in profit.

Are you in a 10% margin business where you need to be doing $10M a year?

More margin = less stress, a faster path to freedom, and more room to maneuver.

This is why smart founders focus on keeping more…not just selling more.

Want better margins? Fix what’s breaking them.

Improving profit isn’t about cutting corners. It’s about tightening the engine.

Here are some practical ways to do that:

1. Raise your prices

This is the easiest way! Most founders undercharge. If you deliver real value, don’t be afraid to price accordingly. A small price increase can mean a big jump in profit, without needing more customers.

2. Focus on high-margin offers

Every business has products or services that quietly eat up time and resources. Cut the low-margin ones, and go all-in on what works best. First though, evaluate your profit margin on each of your offerings. 

3. Streamline operations

Look for hidden inefficiencies like manual work, bloated processes, or wasteful spending. Can software help? Can someone on your team own and improve a process? Even 5% savings can add up quickly.

4. Watch your COGS

Negotiate better deals. Reduce waste. Buy smarter. Every dollar saved on COGS is a dollar added to profit. You’d be shocked how many vendors you can call up and negotiate with. Today! 

5. Track your numbers monthly

Don’t wait until tax season. Review your P&L every month. Know your gross profit, net profit, and margins like you know your email login.

6. Use profit as a decision filter

New office? New hire? New service line? Before you commit, ask: will this improve our margins—or hurt them?

Profit First.

There was a whole book written on building profit into your business. The key: think in percentages, not dollars. As your business scales, keep a profit margin at a fixed percentage. Build it in as a line item in your budget. How many of your truly do that today?

That way as you scale, you don’t keep eating away at your margins. You protect them, you build them in, you plan for them.

This is the way to really do well financially, and yet too many folks are too afraid to do it. They are more concerned with keeping affordability rather than ensuring margin is there.

But if you want to stay in business? Then you need to build it in. It’s not a viable business if you don’t have enough profit or runway. 

Final thought

Profit isn’t just about making money. It’s about building a business that lasts.

It’s what gives you breathing room.

It’s what gives you the most ability to sell your business. 

It’s what allows you to make smart hires.

It’s what lets you walk into the next quarter with confidence, not panic.

So if you’re chasing growth – great. Just make sure you’re keeping what you earn.

That’s where real leverage comes from.

So ask yourself these questions:

1. What percentage profit margin am I at?

2. What percentage profit do I want to get to?

3. Do you have line items in your financials for profit built in? If not, add it in.

We want your feedback. Is this type of stuff helpful? What would you like to see from us?

—The TRIBE Team