3 ms·

It's nice to see coverage of an exciting trend (of which I'm happy to be a part), but it always cracks me up when financial publications classify companies base

by mhartl 13y ago

It's nice to see coverage of an exciting trend (of which I'm happy to be a part), but it always cracks me up when financial publications classify companies based on sales rather than profits. Defining a "million dollar company" as a company with a million dollars in annual sales is absurd.

jsiarto 13y ago
This. If your company clears one million in yearly sales and spends $980,000 to make that happen--you are running a $20,000 per year company. There is nothing wrong with this, but I hate when these metrics get thrown around without context. There are $1M companies that make less profit than a hot dog cart (which subsequently, in the right location is a damn good business).
- beat 13y ago
  On the other hand, low-margin businesses are often low-risk, stable businesses. A grocery store has crappy margins, but excellent stability.
- Axsuul 13y ago
  This is unlikely which is why $!M companies are significant because most likely their margins aren't that low.
chii 13y ago
my guess is they don't know the profit reliably?