What happens when we life in world of instantaneous information? When the majority of the people you meet are formally educated [as opposed to a couple hundred years ago]? I believe we have to complicate things. We [as humans] decide that simple is no longer good enough, life have to be harder than that. Well it doesn't. I've been thinking a lot about this and so, in response to creating some simplification to life, here's my Simple Math [well see how many entries I make]...
The following is a simple business equation that most businesses have decided to not worry about.
R minus E equals P [or L]
R is Revenue: all the dollars that come in from customers [not from investors, or tax credits, or some other strange and wonderful means to confuse us simple people out there]
E is Expense: all the dollars that get paid out to other people [including the US government for taxes, employees, etc.]
P is Profit: when the sum is in the positive range [above ZERO]
L is Loss: when the sum is in the negative range [below ZERO]
Regardless of who you are -- a person, a company, a corporation, a government -- if you add up all your R's and then subtract all your E's and it a P, it's good and if it's a L it's bad. Oh, I know there are lots of geniuses and experts [those are the ones that like to complicate things in life] that will state that not all Losses are bad and not all Profits are good. Well, in my little simple world - if I spend more than I make, it's bad - If I can spend less than what I make, it's good.
So, if you want to start a business, remember that simple equation - because if the P is big enough, then you can afford more E's [whether personally or in your business] and if you have too many time when it turns out to be a L - then you need to figure out how to eliminate E's or get more R's.
That's my Simple Math lesson for today!!