Revenue Ain't Shit
Revenue is easy to flaunt. Profit is harder to explain — and that's exactly why most gurus won't talk about it.
For the uninitiated: the world wants you to think revenue is the key measure of business expertise. Social media is full of gurus who flaunt their supposed acumen and, on that basis, ask for your trust and attention — whether it's for their message, the "like" they need you to click, or the product they're selling, be it a mastermind subscription, a sponsored product, or whatever else.
For many, watching someone display their annual revenue numbers feels like the right credential to focus on. It might even be true — acknowledged by others — that the revenue is real, giving these personalities an even deeper aura of credibility.
Here's the problem: that top-line number ain't shit.
A business can generate massive revenue — consecutive years of growth, even — and still be a losing proposition. Revenue is nothing more than total sales generated from operating activities. If you're going to pay attention to someone, make sure they actually know how to run a profitable business. Because as much skill as it takes to generate sales, it takes at least as much — if not more — to ensure revenue exceeds operating expenses.
Some will point to Amazon, Airbnb, FedEx. Fair. History is full of successful companies that operated at a net loss for years, using public equity, private capital, and debt markets as their lifeblood while they built the business. That's not what I'm arguing.
What I'm arguing is this: if you want to learn how to run a business, learn from people who have run profitable ones. Anyone can tout top-line numbers. That doesn't mean they know how to operate an enterprise.
Every guru wants to tell you their secret to generating revenue. Few can explain what it takes to run a tight ship — how to use debt appropriately, how to control operating expenses, how to turn revenue into operating income. That's the actual work. Without it, the revenue doesn't mean much.