Why Small Business Owners Always Undercharge

gross margins. So, gross margins are wildly misunderstood, which is interesting. Um, if you are if you are a business owner, you you have to learn the language of business. All right? It is it is for sure. There there are different languages, but there's there's not a huge amount of words that you have to

know. You might need to know like a hundred terms. And think about this as like you were studying for a test, right? Like learning a 100 terms, not that hard to understand. And it almost all of them are relationships between two things. That's what almost all of these terms are. So what is gross

margin? It's one word that's a relationship between two things. How much you charge and how much it costs you to deliver the thing. And the difference between those things is your gross margin. To be clear, that's not your net profit margin, which is a different ratio, right? Between two, not necessarily ratio, but the difference

between two different numbers, right? But your gross margins are very important because it is what dictates everything else in the business. So what do I mean by that? If you like your net margins cannot exceed your gross margins. Think about that for a moment. If you have if you're like, "Man, I'd love to run a 50% net

margin business." That's an amazing goal and I love that goal for you. If your gross margins are 50%, that means that you can have literally no other cost besides the thing you sell in the entire business. You can't have any cost of acquiring customers. You can't have any fixed overhead. You can't have any

employees that are not specifically in delivery. You can't have any admin, any help. Of course, now the likelihood of of you getting to a 50% margin when you have 50% gross margins is basically zero. And so this is why and and traditionally small business owners will undercharge because they sell out of their own wallet, right? And they sell