Only Brokies Ignore Margins

Want your business to put more spending cash in your pocket? If so, you might be going about it all wrong.

Most business owners view their take-

home pay as a simple calculation directly tied to how many sales they generate.

Whether you're selling products, services, or sponsorship deals for your faceless page or personal brand, generally speaking, higher sales translate to greater take-home income.

This mindset has a significant flaw: gross revenue isn't the sole determining factor for net profitability.

For those new to entrepreneurship, gross revenue represents your business's total incoming money, typically measured by your sales volume.

Net profit, which is far more crucial, represents what remains after covering all operational costs.

If you operate small-scale businesses as individual proprietors or single-member LLCs, your personal earnings likely correlate almost entirely with your business's net profitability.

Simply put: Whatever’s left over at the end of the month is how much you pay yourself.

Larger enterprises require more complex structures where this straightforward approach wouldn't work effectively.

However, for the vast majority of you, net profit directly equals your pre-tax earnings.

This leads to the key question: What methods can increase the disposable income flowing into your personal accounts?

While getting more sales is one solution, as mentioned previously, it's certainly not your only option.

Actually, for many entrepreneurs, pursuing revenue growth often proves to be the most challenging path toward increasing personal income.

This is particularly true if you're running an established operation already generating substantial revenue.*

*Conversely, if you're operating a startup that's barely surviving financially, revenue generation should absolutely be your primary focus.

The discussion around profit margins becomes even more compelling when considering which business type to launch.

Many entrepreneurs gravitate toward the agency model because tasks can be delegated to team members.

What they don’t consider is the fact that personnel costs typically represent the largest expense for most companies.

Agencies generally maintain approximately 30% profit margins on average.

This means that for every $100,000 in annual gross sales, $70,000 covers expenses, leaving just $30,000 in actual profit.

Expanding this example: a business generating $1 million annually would retain only $300,000 after expenses.

That breaks down to roughly $25,000 monthly in pre-tax personal income.

While most would celebrate earning $25,000 monthly, the challenge lies in actually building that million-dollar annual business.

Now consider this alternative: What if you could create a $360,000 annual business while still keeping the same $300,000 profit?

Which seems more achievable - establishing a $360,000 yearly business or reaching $1 million annually?

Clearly, the smaller revenue target would be significantly easier to accomplish.

What profit margins should you anticipate for today's most popular business frameworks?

Here's the breakdown across different percentage ranges:

75% to 99%

• Freelancing

• Clipping

• Consulting

• Coaching (organic mktg only)

• Established SaaS companies

• Faceless Pages

• TikTok Shop Affiliate

• UGC Creator

• Info Products (organic mktg only)

• YouTuber / TikToker

50% to 74%

• Coaching (ads + organic)

• Info Products (ads + organic)

• 7-figure+ media company (includes content brands, faceless pages, etc)

• Professional YouTuber / TikToker

• Boutique Digital Agency

• Boutique e-Commerce

25% to 49%

• Most e-Commerce

• Most agencies

• Brick and mortar businesses

• Startup SaaS (which usually run at negative return rates in the beginning)

This comparison shows that regardless of your income targets, choosing agencies or e-commerce might require building a business three times larger to achieve identical earnings.

The distinction between specialized versus general agencies could mean needing 50-100% more revenue for the same income.

Many high-margin business models at the top cannot be sold in acquisitions (lacking equity value).

Traditional entrepreneurs often don't consider these "real businesses" for this reason.

Nevertheless, if your objective is earning $5,000-$10,000 monthly, selecting higher-margin models will will make your life dramatically easier.

This is especially relevant if you plan decades of work ahead without needing a massive cash exit (which isn't guaranteed even with traditional businesses).

Ultimately, profit margins dramatically influence the disposable income reaching your personal accounts each month.

Select a high-margin business model, and most of every sales dollar flows directly to you (pre-tax).

Choose poorly, and you might need 2-3 times the revenue to achieve equivalent personal earnings.

💡 Takeaway: Simple math shows a business with 80% margins produces 250% more take-home income than one with 30%. Before jumping into an agency or ecom store, run the numbers on what you’ll actually keep.