Today is “One Big Story” day, a prompt from Seth Godin's blog, and he digs into some of the myths and stories we tell ourselves about numbers. Success is usually in the margins; what's surprising is how little we talk about margin. In the real-life stories shared below, the lessons are learned the hard way. Profit margin, while not as sexy as top-line revenue growth, is what you should sweat. Make it worth the sweat. Margins aren't just for business; how about your personal character? Can you improve the profit of your character? Dr. Laurie Santos has some thoughts.

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After building several businesses over the last 25 years, I have spent as much time working with numbers as I have anything else in the business. When I was younger, it was difficult to comprehend math; it was the "why do I need this?" syndrome. I started my first business in college, and within six months, I understood (some of) the numbers.

The first company was a college painting company with total revenue of $75,000 in a summer season of approximately 5 months. After painting, supplies, and payroll, I had $15,000 left, which I would later learn was the gross margin. I don't know how much money you earned in college; in the 90s, this was lottery money. I used a payroll processing company to handle payroll taxes; what I did not have or use was a regular accountant; at the end of the year, Uncle Sam came to call, and my 1991 summer windfall was wiped out. This was also the year I switched from studying Psychology and English to Finance and Accounting.

The prompt today for this story is Seth Godin’s blog and My Big Fat Greek Wedding. According to the data, forget Avatar and The Avengers, the most profitable movie, is MBFGW. 

Ten years after my first accounting lesson came the most important business lesson I ever learned. This lesson concerns keeping the doors open and ensuring the business can withstand the storms and thrive in a hypermarket. In 2002 I merged a technology consulting company with a software development company. In the early 2000s, HIPAA was about to become a requirement in all healthcare facilities; if your facility wasn't HIPAA compliant, you risk not getting paid by the government. HIPPA is the Health Insurance Portability and Accountability Act passed in the 90s. The market was getting ready to explode, and we would take advantage of it.

In 2002 both companies had revenues in the $500,000 per year range, each with a net margin of around 20% or $100,000. Three years after the merger and exploding growth, revenues were $5,000,000, or an increase of 900%. Here's where the lesson hits you like a punch in the face from Mohamad Ali – net profit at $5,000,000? $100,000 or 2%⁉️

Top-line revenue and chasing growth are good things, especially when starting out. If you ask most financially savvy business people, they will tell you cash flow closes more business doors than anything else. You need to understand your margins to pay attention to your cash flow. There is a common saying among business people, “Sales covers all ills.”  Strong sales show that one part of your business is doing well; if you are not watching your margins, sales won't always save you.

Listen up, kids; I spent the first 10 years of my career chasing sales and top-line growth. It still hurts to think about how much time and effort went into building a multimillion-dollar company only to make the same amount of money as a small consulting firm. At the same time, this lesson is not one I could have learned anywhere else; this is one you have to live to learn. The good news is that you will always remember it once you learn it.

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In this quick video on Big Think, Dr. Laurie Santos walks through character strengths and a few things to consider if you are interested in cultivating the most important strengths.

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