Part 2 | FAQs
Q: I’m confused about profit on the P&L and profit on the Lead Cash Report. How are they different?
The profit that shows on your P&L is the profit you will be required to pay tax on at the end of the year. It is simply a calculation of your Revenue minus all your Expenses.
On the Lead Cash Report, we teach you to think about profit differently. We want you to decide ahead of time what your profit will be. We want you to decide what to do with the money you receive in revenue very differently than just taking home what is left after expenses. We want you to do the math backward. Decide what your revenue goal is and then decide how much of that you will use for profit, taxes, and marketing. Then use that number to know how much you can spend on expenses.
Q: Why do you want us to figure out how much to spend on marketing before expenses?
Marketing is an actual expense in the eyes of the IRS, but as a business owner we want you to see it as an investment in your business. It is the most important investment for growth. But thinking about profit and marketing as a DECISION you make ahead of time before expenses, we are forcing you into deciding how much you want to grow and how much you want to profit.
This is a genius way to think about your business and will inform each decision you make as it applies to expenses and activities you agree to engage in. We want you to truly understand that growth and/or profit are the signs of a healthy business. And because they are initially at the expense of each other, the decision needs to be conscious.
Q: I’m confused, can you help me?
Stop it. Really. It’s indulgent to be and stay confused about your money and your business. If there was ever a time to focus your brain on truly trying to understand these concepts it is right now. Make a list of every question you would love to ask us. The answer each of those questions to the best of your ability by reviewing the course, googling what you need, talking to your account, and reviewing financials with your bookkeeper. The answers are available to you, we don’t have them all.
Q: What is the most important number on the Lead Marketing Report?
All of them. That report, when completed properly gives you the insight you need to make decisions about where and how to spend money and how effective your marketing is. The formula for growth is finding a way towards aggressive acquisition. This means you spend as much as you possibly can to get a customer and then increase the lifetime value of that customer by offering additional products on the back end. In order to do this, you must know what it costs to get a customer and how much you will make in the long run once you do. If you find a way to break even on your front-end and have the back-end be profit, then you will be able to grow faster than you imagined by “buying” customers with good marketing.