WELCOME TO ISSUE NO #052

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📆 Today’s Rundown

Hey 👋, hope you had a great week! I bet you missed me, but I was so busy cooking something that you’re going to love. Stay tuned for more info! 👀

In the last issue, we discussed why tracking Gross Margin matters, and now we are moving with the next topic from Cash Flow & Expenses content.

Let’s talk about ⬇️

Gross Profit vs. Net Profit

I’m going to start this issue by making a bold assumption:

You're probably mixing up gross and net profit.

Relax—don’t panic! This happens to even the savviest SaaS founders. And honestly, it’s not your fault. Finance jargon was invented by accountants who apparently hate clarity.

So today, let’s finally clear this up in plain English. (And maybe have some fun along the way.)

Ready? Let’s go. 👇

TL;DR

🍰 First Up: Gross Profit (Your Delicious Cake)

🍰🥄 Next: Net Profit (The Cake After Your Friends Dig In)

🤔 Gross vs Net Profit—Why Both Matter to SaaS Founders

🔥 Bonus Round: Operating Profit (Yes, another one!)

💡 3 Practical Tips to Track (and Boost!) Your Profit Margins

🍰 First Up: Gross Profit (Your Delicious Cake)

Gross profit is like baking a delicious cake. It’s the money left over once you subtract the direct ingredients used to make your SaaS product.

These “ingredients” (also known as Cost of Goods Sold or COGS) usually include:

• Your AWS or cloud hosting bill (yeah, those scary monthly invoices...)

• Software licenses directly tied to product delivery (not the fancy stuff you bought for marketing!)

• Server maintenance and the tech wizard salaries keeping your platform alive (thanks, tech wizards!)

How to calculate it (no math trauma, I promise):

• Total Revenue: $500,000

• Cost of Goods Sold: $100,000

Gross Profit = Revenue - COGS
👉 $500,000 – $100,000 = $400,000

Why should you care?

But here’s the catch: Gross profit doesn’t show you the whole financial story. That’s where net profit steps in...

🍰🥄 Next: Net Profit (The Cake After Your Friends Dig In)

Imagine you baked that awesome cake (your gross profit). Great! But then your friends (expenses) come along and start helping themselves.

• Marketing eats a big slice.

• Payroll takes an even bigger one.

• Taxes show up late and demand a slice too (seriously?!).

Whatever’s left after all your friends take their pieces? That's your net profit.

How to calculate net profit (still no tears, I swear):

• Total Revenue: $500,000

• COGS: $100,000

• Marketing & Sales: $100,000

• Salaries & Overhead: $150,000

• Interest & Taxes: $50,000

Net Profit = Total Revenue – ALL Expenses
👉 $500,000 – $400,000 = $100,000

Why should you care?

Need clarity on your financial strategy or cash flow optimization?

I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.

Ready to level up your finances?

🤔 Gross vs Net Profit—Why Both Matter to SaaS Founders

Here’s the big secret:

• Gross profit shows investors if your core SaaS business is scalable. They want proof your product isn't just good—it’s profitable.

• Net profit tells you (and investors) if you’re managing your overall business efficiently. Even the best SaaS product can crash and burn due to out-of-control expenses.

🔥 Bonus Round: Operating Profit (Yes, another one!)

Operating profit is your profit before interest and taxes. It shows how well your SaaS performs day-to-day, without debt payments skewing the picture.

Think of it as:
“Profit with fewer distractions.”

Why care about operating profit?

💡 3 Practical Tips to Track (and Boost!) Your Profit Margins

Let’s wrap up with some juicy, actionable advice you can use today:

1️⃣ Check Your Financial Pulse Weekly (Not Quarterly)

• Seriously, quarterly check-ups are for slow, old-school corporations. You run a SaaS, not General Motors.

• Track your cash inflows and outflows weekly so you spot problems before they explode.

2️⃣ Keep Your COGS Crystal Clear

• Sit down with your team and clearly define what counts as COGS.

• Remember: If you stopped selling tomorrow, any cost you’d still have (rent, office snacks, foosball tables) is NOT COGS.

3️⃣ Automate, Automate, Automate

• Stop torturing yourself with spreadsheets.

• Use software to automatically calculate your profit margins. Fewer human errors, fewer gray hairs. Win-win.

🥳 Woohoo, You Made It!

Congrats—you're officially smarter than 95% of SaaS founders when it comes to profits. (Made-up statistic, but it feels about right.)

Still got questions? Need help getting your SaaS numbers right? Or just want to talk about cakes and profits?

Just hit reply! I’m always here to help you grow (and eat cake).

Cheers to your profits,

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