Quick Tip – Get Close to the Money

What drives revenue for your company? – Issue #110

Companies that fail to generate revenue consistently don’t stick around for very long. I’m not saying that they necessarily need to be profitable right away, though. Heck, Amazon was founded in 1994, first traded publicly in 1997, and didn’t turn a profit until 2001. 

However, money does need to flow into the company to keep the lights on and pay the employees. Money also fuels growth, and growth determines survival.

During my years of working inside large corporations and small startups, I noticed something:
Those who control how money flows into the company have the most power.

Those who couldn’t tie their work to revenue were always struggling to claim their power. They were seen as a “cost center.”

When the company had to save money, they never touched the “moneymakers” (e.g., Sales, Advertising, Marketing). They laid people off in the cost centers (e.g., Design, Accounting, HR, IT).

From Investopedia:

“A cost center is a department or function within an organization that does not directly add to profit but still costs the organization money to operate. Cost centers only contribute to a company’s profitability indirectly, unlike a profit center, which contributes to profitability directly through its actions.”

If you currently work in a profession that is considered a cost center within your company, I’m not suggesting that you need to change careers to get yourself into a “revenue center.”

A company may highly value the people in Sales and Marketing. Still, it can’t be successful without all of the other employees that contribute to bringing its products or services to life.

However, you should deeply understand how your business generates revenue. Get close to the money.

Talk with folks in Sales, Marketing, Advertising, and Finance to learn everything you can. Find out how your work connects to what they do.

You should know how the work you do at the company directly or indirectly contributes to making money or saving money. Yes, the executives should value what you do, regardless. However, your work will be seen as even more essential if you can connect the dots between your contributions and what makes the company successful.

For example, I worked in Design for over 15 years. We knew that our contributions mattered a great deal. But, there were times that we felt powerless, and our jobs were in jeopardy because we couldn’t prove that we were more than a cost center.

However, when I worked in organizations that successfully demonstrated how we drove revenue for the company, the conversation changed. Our value was clear, and we were able to control our destiny.

Show how the work you do helps the company make or save money — in some way — and your role will always be viewed as valuable.