“You're Working Towards A Number. Just Not The Right One.”
Most owners set a revenue target. Some set a profit target.
Almost none work backwards from an after-tax income target.
But that's the number that actually matters. Not what the business makes. What you personally keep.
On a $1.5m business at 15% net profit, you're making $225k before tax. After company tax at 28%, you're keeping around $162k.
If your goal was $200k after tax, you needed $278k pre-tax. Did you know that going in?
Decide the take-home number first. Work backwards. Add tax back. Now you have a real profit target to build the business around.
What number are you actually working towards?