P&L: The Bloodline

THE BRUTAL REALITY: REVENUE IS VANITY

You just made $1M in sales. You think you're rich. You're wrong.

The Conflict: Revenue is a vanity metric. Profit is sanity. Cash is reality.

The Truth: Most businesses die because they "grow themselves to death." They sell a product for $10 that costs $11 to deliver. Scaling that is just scaling a disaster.

The Fix: You must master Gross Margin. It is the "Breathing Room" of your business.

1. THE GROSS MARGIN MOAT

If your margin is 20%, a single mistake kills you. High-margin businesses (80%+) are robust. They can survive bad hires and bad ads because the product is so profitable.

2. THE NET PROFIT TRAP

Net Profit is what's left after *everything*. Don't be fooled by "EBITDA." EBITDA is for people who want to hide how much their equipment is rotting. Look at the Net.

SMART WORDS

COGS (Cost of Goods Sold)

The "Raw Cost." Exactly what it costs to produce one unit of your product.

BURN RATE

The "Fuse." The rate at which you are burning through your cash pile every month.

GROSS MARGIN

The "Oxygen." The percentage of revenue left after paying for the product itself.

TACTICAL DIRECTIVES

1. The Margin Audit: Calculate the true Gross Margin for every product you sell today.

2. The Expense Cut: Find 3 recurring costs that don't directly produce revenue and kill them.

3. The Profit Minimum: Refuse any project that doesn't promise at least a 15% Net Margin.