Revenue feels like the obvious measure of a growing business. But top-line growth does not always tell the full story. Focusing only on revenue, without watching what’s left after costs, can quietly eat away at margins and mask bigger problems.
Joining us on this episode of Business Trends Today is George Deeb, Managing Partner at Red Rocket Ventures, Forbes contributor, and author of 101 Startup Lessons: An Entrepreneur’s Handbook. Deeb has helped scale and advise hundreds of companies on driving smarter, more profitable growth.
For most small business owners, a busy sales team and a growing revenue number feel like proof that the business is on the right track. But Deeb says that the picture can be deceiving. Selling more does not automatically mean earning more.
Why you should track more than revenue
Revenue is the number most business owners watch first. It shows up in every report, every meeting, and every conversation about growth. But it does not always reflect how a business is actually performing.
"The reality is all revenues are not created equal.”
Deep discounts, poor product mix, and weak pricing discipline all drain profitability while revenue climbs. Deeb says building a business around volume alone creates habits that are hard to unwind later.
“You don’t necessarily want to be driving revenues. You want to be driving profitable revenues. And you’ve got to make sure you’re measuring your team for those right metrics,” Deeb said.
Measuring the right metrics
The key metrics Deeb says businesses need to track, in addition to revenue, are qualified leads, proposals, and conversions.
Qualified leads are the potential customers most likely to actually buy. Not every inquiry counts. Owners need to know how many real opportunities their marketing is generating and whether their sales team has enough to work with.
Proposals measure how many of those leads are serious enough to move forward. When a lead turns into a proposal, there is a real chance it becomes a sale. Tracking that number shows where deals are being won or lost.
Conversions are the closed sales. But the details inside that number matter just as much as the total. Conversion rate, product mix, and average order size all reveal how well a sales team is actually performing.
“Quantifying the leads, not only the total leads, but the qualified leads and how much of those actually have a chance of turning into sales,” he said.
What businesses get wrong with commissions
How a business pays its sales team drives everything that follows. Deeb says most owners get this wrong from the start, by building commission plans around revenue, when they should be building them around profit.
Tying pay to gross profit changes behavior, he says. Reps have less incentive to discount. They learn which products carry stronger margins and start pushing those instead. The result is a sales team that drives revenue while protecting the bottom line.
Owners can also tie compensation to conversion rate or upsell rate, depending on what the business needs most. The key is simplicity, Deeb says, pick one or two metrics and build the entire compensation plan around those.
Capped quotas create another problem. When a rep hits their number early, they stop selling. Removing the ceiling fixes that. Uncapped plans with tiered percentages keep reps motivated through the end of the month.
“The best way to do that is to uncap their commission plan. Don’t give them a set quota or target to hit for the month. Leave it uncapped,” said Deeb.
Revenue is easy to chase, but profit is harder to build. Closing the gap between those two metrics doesn’t have to be difficult. Shifting a commission plan from revenue to gross profit, uncapping quotas, and tracking the right metrics can quietly transform how a sales team performs and how a business grows.
Businesses built around profit, not just revenue, are the ones built to last.
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