Was All That Work Actually Worth It?

Every Monday morning, before I open my inbox or look at my to-do list (but not before coffee... I’m not insane), I check one number.

Not revenue.
Not total profit.
Not cash in the bank.
Not how many new sales came in.

I check gross profit, which is what’s left over after taking our sales for the prior week and subtracting the cost of goods sold (or direct costs) from it.

Basically, what we actually made from the work we did.

Here’s what those direct costs might look like depending on your business:

• Service-based: subcontractor costs, wages, or client subscriptions

• Product-based: materials, packaging, or shipping

• Digital products: ad spend, affiliates, or proccessing fees

Here’s why that’s the number that matters most to me.

Revenue looks exciting, but it doesn’t tell you if the work was worth it. You can have your biggest week ever and still walk away with barely anything once you pay for the costs that got you there.

Profit isn’t perfect either because those monthly overhead costs hit at random times. One week might look amazing and the next might look terrible, but over the whole month it usually evens out.

Gross profit sits in the middle.

It shows how efficiently we’re running right now and how much we’re keeping from each sale before overheads come in.

These are the kinds of questions I can answer just by looking at that number:
Are we doing profitable work or just staying busy?
Are our delivery costs creeping up?
Are we putting in more effort but still getting the same results? 

It’s simple, but it tells me everything I need to know. I can look at it Monday morning and instantly feel if last week actually moved us forward.