Episode 22: Profitability – Revenue, Gross Profit & Net Profit, with Colin Sprake
Colin Sprake is a four-time best-selling author and mentor to over 47,000 entrepreneurs!
Colin has built several different million dollar businesses within 6 months. He has over 30 years of business experience having come from the mining industry to building his own multi-million dollar businesses from the ground up.
A dedicated teacher, Colin is the Master Trainer at Make Your Mark Training and Consulting and is devoted to people achieving huge success in their businesses. His purpose is to assist business owners to dramatically improve the number of businesses that succeed. After all, failing businesses affect us all in negative ways.
Using decades of business experience, Colin speaks and trains on a wide variety of topics for corporations, organizations & associations. Colin Sprake is all about delivering what is required to achieve the desired result and holding you accountable for your own success.
What you’ll learn about in this episode:
- Why you can’t afford to ignore your numbers as a business owner
- The fallacy that business owners can have problems with their personal finance and expect to do well financially in their business
- Revenue: the money that you bring in
- Cost of goods: the time and materials it takes to create your product or service
- Gross profit = revenue – cost of goods
- Net profit = gross profit – overhead
- The difference between fixed and variable costs and examples of each inside your business
- Why you pay your bills from gross profit (not revenue) and why you can’t expect to pay for a $40,000 employee with $40,000 in revenue
- Break even = total overhead (variable and fixed costs) ÷ gross margin (gross profit as a percentage)
- Why you need to understand your break even point before making any financial decisions