While at a sales retreat a week ago, my associate Shanti Hill made an interesting comment that she uses when consulting with her clients.

Revenue is for vanity, Profit is for Sanity

Revenue is for vanity profit is for sanityIt’s all money RIGHT!?!

It’s not. I’m not a financial professional or accountant…I like simple explanations…

  • Revenue is the money coming in from the sales of your products and services. As a stand alone indicator in your business, it is not necessarily an indication of a healthy business.
  • Profit is the money you have left over after you take out all of your business expenses. This is on track to a healthy business with a strong foundation. (With my clients, I take it a step further to see if you are strong foundation in balance with your family and outside commitments.)

You could have high revenues, but if you have high business expenses resulting in low profits, your sanity is not going to be doing very well.

If you have high revenues and you are managing your expenses, your sanity is going to be in more balance.

Take it a step further and I have seen the saying…

Revenue is for Vanity, Profit is for Sanity, Cash is Reality

Generating cash demonstrates performance. Cash reserves, access to credit and access to equity are essential to building a healthy business and again saving your sanity.

So would you rather high revenue or high profits?

I personally value sanity with cash in the bank…lets go create and RevUp your profits together!

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NOTE: If you need tax coaching or financial advice, you can contact Shanti Hill at Shanti Hill Tax Coaching http://shantihill.com/.