The Most Overrated Metric in Your Business with Amy Traugh
- 3 days ago
- 9 min read
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The Most Overrated Metric in Your Business
Why revenue alone won’t tell you if your business is healthy, sustainable, or actually supporting you long term.
Stop Celebrating Revenue as Proof You’re Winning
You hit your revenue goal. Maybe you even exceeded it. You feel that rush of excitement and tell yourself this proves your offer works, your clients are happy, and you’re on the right path. Then you look at your bank account and realize the money you see doesn’t match the effort you’re putting in. How is that possible?
One listener asked a powerful question: what is one metric business owners think reflects a great experience, but actually doesn’t? The surface answer seems simple. But when you dig into it there’s so much underneath. The metric I want you to rethink is revenue.
Yes, revenue matters. But revenue alone does not equal a great client experience and it absolutely does not equal a healthy business.
Why Revenue Feels Like the Goal
Revenue tells you someone bought. That’s it. It signals that your marketing worked, your messaging resonated, and there’s demand for your offer. That’s good. But it doesn’t tell you whether clients implemented what you recommended, got results you promised, would refer others, or whether delivering those results was sustainable for you.
Revenue is loud. Profit margins are quiet. Those best month ever posts and striped screenshots make revenue feel like momentum. Profit margin? It feels like math. And we tend to avoid deep math.
Revenue is simple. FiftyK is fiftyK. Profit margin forces you to go deeper. You have to know your real expenses. You have to be able to pay yourself consistently and understand which offers are profitable. It takes strategy, not buzz.
Emotionally, revenue feels like proof that you’re good at what you do. When your brain sees a seven figure business it assumes freedom. But it doesn’t ask about profit margin. If profit margin isn’t healthy, that revenue is a hollow number.
Profit Margin Shows Sustainability
Let’s talk numbers because these examples matter. A million dollar business at a 15% profit margin is taking home $150,000 before taxes. Compare that to a $400,000 business at a 50% profit margin taking home $200,000. Which business has more breathing room?
Because when you look only at revenue, you can easily choose the million dollar business over the $400,000 business without seeing that the smaller business is actually more sustainable. Incomplete data leads you to emotional decisions like raising prices impulsively, launching new offers too often, or hiring prematurely because you’re chasing a revenue goal instead of building a healthy financial structure.
Revenue is immediate. You see it as soon as someone pays. Profit margin is revealed over time. It comes after expenses, payroll, taxes, and reflection. That delayed feedback can feel harder to grasp than instant revenue notifications.
A Real Example: When Revenue Isn’t Enough
I worked with a client who was consistently making $30,000 months. From the outside that looks strong. But when we calculated her net profit margin it was only 12%. She had priced her offer based on what felt marketable, not what it cost her to deliver. Then she layered in extra support features, hired help behind the scenes, and suddenly she was cash flow watching, tired, overwhelmed, and unable to take breaks because revenue had to stay high just to cover costs.
Together we audited her offer to identify what actually moved results for clients and what was costing her time and money without real impact. We adjusted the structure to better align delivery with pricing so profit margin could expand, not just revenue.
If you’re putting in 40 hours a week and keeping only 15% of profit, that model is misaligned. Thin margins force you to rely on new sales just to keep the lights on. That’s burnout fuel.
Revenue Attracts. Retention Shows Satisfaction. Profit Margin Proves Longevity
For online service providers, a healthy net profit margin often falls between 30% and 50%. To get there, you must count paying yourself as an expense. A business that can’t pay its owner consistently isn’t healthy. If you only take money when there’s “extra” that’s not profit. That’s just what’s left.
Profit margin is like oxygen. You don’t notice it when it’s abundant. You notice it when it’s tight. Healthy margins give you space to think strategically and improve client experiences intentionally.
So next time you look at your numbers, don’t just ask “how much did I make?” Ask “what was my profit margin?” and “did this structure support me?” Great client experience isn’t just how clients feel. It’s whether the model lets you keep delivering long term without pressure stealing your joy.
If you're ready to finally ditch the data drama and create a simple, repeatable process for growth, this is exactly what we do inside Metrics Mastery.
Get started for free at amytraugh.com and let’s build a business that’s backed by strategy, not stress.
Until next time, stop guessing and start growing.
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Transcript for Episode 45. The Most Overrated Metric in Your Business (and What to Track Instead)
You hit your revenue goal. Maybe you even exceeded it. You feel that rush of excitement and you tell yourself, okay, this proves that my offer works.
My clients are happy. We're good. But then you look at your bank account and you realize that the amount you see doesn't match the effort you're putting forth.
How is that even possible? I recently received a question submitted by Blythe Ellsworth, owner of Quick Soak Solutions. And she asked, what is one metric business owners think reflects a great...
experience, but actually doesn't. This is a brilliant question, because the answer seems really simple on the surface, but there are so many layers underneath it.
In my opinion, it comes down to one metric, and that metric is revenue. Now, let's be super clear. Revenue matters.
However, if your sales are inconsistent, you've got a visibility or positioning conversation to have. But revenue alone does not equal a great client experience, and it absolutely does not equal a healthy business.
So I want you to zoom out for a minute. Revenue is basically telling us that someone bought. That's it.
It tells you that your marketing strategies worked, the messaging resonated, and that the demand exists, which is good. But what
it doesn't tell us is whether the client actually implemented the strategies that you recommended, whether they got results and would refer someone your way, or even deeper than that, whether this experience was sustainable for you as a business owner to deliver.
So then why do we as business owners so often obsess over revenue instead of profit margins? First, revenue is loud.
Profit margins quiet. Revenue gets celebrated everywhere. Those best month ever posts, those striped screenshots, the, oh my gosh, my client just closed 100K sales in a week.
No one posts, we tightened up our delivery and improved our net profit margin by 12%, even though it's incredibly powerful.
Revenue feels like momentum. But profit margin, it almost feels like math. And second, revenue is simple. 50K is 50K.
It's a really clean number. But profit margin requires you to go a little bit deeper. You have to know what your expenses are.
You have to be able to pay yourself consistently. You have to have the ability to know which offer is selling.
It takes a little bit of strategy. So revenue becomes the default scoreboard. And there's also an emotional layer because revenue feels like proof that you are good at what you do.
And you are. But profit margin does not give you that same ego boost. In fact, it forces you to ask yourself some really uncomfortable questions.
Am I over-delivering? Is my offer actually structured inefficiently? Revenue feeds confidence. The And this is where it gets really dangerous, especially in the online space.
Income claims without context are distorting our reality. When your brain sees seven-figure business and assumes freedom, what's happening? It's not asking, well, what was the profit margin?
I want you to consider the math. A million-dollar business is at a 15% profit margin. That is $150,000 profit before taxes.
However, a 400K business at a 50% profit margin is taking home $200,000 before taxes. But my question to you is this.
Which of these two businesses actually has more breathing room? As business owners, we rarely consider this part. It's like comparison.
Thank When you consume incomplete data, you make emotional decisions. You raise your prices impulsively. You launch you frequently. You hire prematurely, all in pursuit of a revenue number that might not even align with the life that you want.
This is why grounding yourself in your own numbers is so powerful. Revenue is immediate. You see it as soon as someone pays, whereas profit margin is revealed over time.
It's after the expenses, the payroll, the taxes, and it requires patience. Revenue also feels a little bit more like control in your business.
You know, for example, if your sales dip, you can market yourself more. If margins are thin, you know, often we think that the solution is structural.
For example, I recently worked with a client who had consistent $30,000 months. punch... Thank Objectively, from the outside looking in, that's really strong revenue.
But when we calculated her net profit margin, it was only sitting at 12%. She built her pricing based on what felt marketable, but not true delivery costs.
And over time, she layered in extra support, added personalized audits, hired contractors behind the scenes to help her manage the load.
And collectively, these decisions she was making squeezed her margin. She was constantly watching cash flow, yet hesitated to take time off because the revenue had to stay high enough just to cover the thin margin.
So to remediate this, we didn't just focus on having her sell more. We really had to get strategic. We started with an offer audit.
We were identifying which of the extra features weren't actually giving her clients results. And... But even more importantly, you have your time.
If you are working 40 hours a week inside your business and keeping only 15% of your profit, that model is really misaligned.
When margins are so thin, you rely way too much on new sales, and it really feeds into a burnout cycle.
A stressed, overwhelmed business owner cannot deliver at their highest level long-term. Because what happens, it starts to suck your energy, your boundaries blur, and you're just stuck in this never-ending cycle.
At the end of the day, revenue proves attraction, retention proves satisfaction, and profit margin proves sustainability. So you might be wondering, well, what is reasonable?
If you are an online service provider, Typically, 30% to 50% net profit is a strong range. But here's the most important part.
You must pay yourself consistently and count it as an expense. If you are only taking distributions and draws when there's an extra little bit left in your account, your margin calculation is incomplete.
A business that does not pay its owner is not healthy. It's just really expensive to run. And when you don't pay yourself, your pricing is misaligned and you personally carry the financial pressure.
Paying yourself forces clarity. It forces you to ask, is this offer actually profitable? If you transfer a 5K to yourself and the business account still feels tight, it's not a failure.
It's just information. And yes, in the early stages of business. you. We'll There may be seasons where your pay is lower.
That is normal. But if you've been in business for a while and still aren't consistently compensating yourself, it is a data point worth getting curious about, worth examining.
Because at the end of the day, your business is not just a mission. It is a financial vehicle meant to support you.
And if it can't do that yet, it's not a failure. It's information. And the information is what allows you to make strategic adjustments.
I want you to think of your profit margin like oxygen. You don't notice it when it's abundant. But you start to feel it when it's tight.
Healthy margins give you room to think strategically and improve your client experience intentionally instead of reactively. The goal is to build a business that supports you.
Well, serving your clients exceptionally well. So when you look at your numbers this month, don't just ask yourself, how much did I make?
Ask yourself, what was my profit margin? And how did this structure support me? A great client experience is not just about how your clients feel.
It's about whether your business model allows you to keep delivering for years without pressure stealing your joy. If this episode resonated with you, this is exactly what I love helping clients with both one-on-one and inside my signature program, Metrics Mastery.
You can get started for free at amytroth.com. And I would love to hear from you. If you have a business question and you're like, I am just stuck, check out the show notes, submit your question, and maybe, just maybe, your topic will be.
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