When Revenue Is Bad

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Let’s talk about revenue and how it can be a false god. 

In a business, revenue is NOT the goal. Profit and, frankly, happiness is what we’re in this for.  Sometimes revenue helps grow both, sometimes it doesn’t. 

But for some reason we’re a little obsessed with growing revenue because it CAN lead to more profit but also because it makes us feel good, like we’re making progress. Plus our ego likes it. 

But, more revenue is more WORK. And our goal in business is not to do more work. Especially since more work usually means more activity, more expense, more headaches and more risk, all of which impact profits and our happiness … our quality of life. 

That’s why I urge companies to think in terms of doing as little work as possible. There’s nothing noble about working for the sake of working.  

Don’t get me wrong, I believe in investing time and energy to create value and earn a profit. But I don’t believe that we should chase revenue without considering the amount of work involved and our return on the work, the ROW. 

So let’s reframe. Let’s think of revenue as work and therefore a bad thing until proven good. It will help us be more careful about taking on more. 

This topic came up in a recent conversation with the CEO of a wine company on the California Central Coast. He was telling me about an opportunity to do a pretty big deal with a new customer and wanted to talk through the pros and cons. 

Looking at the work involved got him thinking. It wasn’t a bad opportunity but the customer was difficult and would require a lot of hand holding plus the packaging and branding would have to be redone. All more work.

Sure it would have added 5% to his revenues but the return on revenue, the return on work, would be meager. 

So he raised his standards, declined to take the business and moved on to look for other, better, opportunities. 

I admire him.  He raised his standards. He exposed the work hiding behind the revenue and chose to be more selective. He’ll be happier and richer for it.  And so can we. 

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