Section 7: Economics, Numbers, and Whether Your Business Is Actually Worth It
Now it’s time to face something important: Numbers.
Not to become an accountant, or fall in love with Excel— But because as a manager, you need to know if what you’re doing is actually worth it.
What does “worth it” mean? That the energy, time, and money you invest are truly creating value. And the only way to know that is through economic understanding. Not vibes, not hype, not guesswork.
First things first: You need to get comfortable with numbers
Many creative managers fear numbers. They say: “I’m all about content, not accounting!” But here’s the truth: Numbers are the second language of management. They’re like a map. They show you where you are, and where you’re headed.
You don’t have to be an accountant. But you do need to know how to ask these questions:
- How much does this thing cost us?
- How much does it actually generate?
- What’s the real profit?
- Where is our money getting stuck?
- What do we lose if we don’t do this?
Key Concepts You Need to Know
1. Cost
What you spend to produce a product or deliver a service.
- Direct: e.g. raw materials, frontline staff
- Indirect: rent, support salaries, software
Important: Hidden costs often cause the most damage. Like: wasted time, rework, hiring the wrong person.
2. Revenue
The money you get from sales. But keep this in mind: Revenue is not the same as profit.
A company might have high sales, but still lose money—because it hasn’t managed its costs.
3. Profit
Revenue minus all expenses. If it’s positive, you’re profitable. If it’s negative, you’re losing money—even with strong sales.
High-level managers measure profit not just in numbers, but in terms of long-term value.
Revenue Model: How Do You Actually Make Money?
This simple question is the root of every financial strategy.
- Direct sales?
- Monthly subscriptions?
- Commission-based brokering?
- Advertising income?
- Platform, service, or physical product?
Many people don’t even know what their revenue model is. They just “work” and hope the month ends in balance.
But you need clarity:
- What exactly is the customer paying for?
- What makes this payment repeatable?
- If you step away today, does your revenue engine still run?
Budgeting: Knowing Where Your Money Should Go
A budget is a “spending map.” Not just to avoid overspending— but to decide if now’s the time to take a risk, hire someone, or wait it out.
Budgeting asks:
- What’s your expected revenue?
- How are you categorizing expenses?
- Do you have enough cash for a rainy day?
- Have you planned for taxes, insurance, or surprise costs?
One of the top reasons startups die? They run out of cash—not ideas.
Cash Flow: The Heartbeat of the Business
You might show profit on paper, but have no money in your bank account. Why? Because your income comes in late, while your expenses leave early.
That’s where cash flow becomes essential.
You need to know:
- When do you get the most cash in?
- When do your expenses outweigh income?
- Are you relying on delayed payments?
- When are you at risk of a liquidity crisis?
A skilled manager doesn’t just look at profit— they forecast cash flow.
A Simple Ruler for Financial Decisions
Whenever you’re about to make a major financial move, ask yourself:
How much cost does this add? What kind of return might it bring? What’s the payback period? Is it building long-term value or just short-term gain? Can I afford it if it fails?
If you don’t think through these, sooner or later the numbers will outpace you— even if your work is creative.
Mehdi’s Wrap-Up
You don’t need to be an accountant. But you should be able to read numbers, understand them, and make decisions based on them.
Financial literacy means:
- Knowing where money comes from, where it goes, and how it grows
- Telling the difference between wasted expense and smart investment
- Being able to tell your team, your investors—or even yourself—why this thing you’re doing is actually worth it
Simple exercise for today
Grab a pen and paper. Pick one project you’re currently working on, and write down:
- All the costs you’ve spent on it
- The total revenue it’s brought (or is expected to bring)
- How much of that is actual profit?
- And: is continuing it worth it—or should it be redesigned?
Next up: Brand and Marketing
That’s where people decide—in their hearts—whether they’ll choose you or not.