The Math That Changed How I Think About Growth

Year five of Rock The House, we hit the seven-figure milestone.

I remember the moment we crossed it. I took a screenshot of the dashboard. Posted something vague on social media about “hard work paying off.”

I felt like I’d made it. Then I looked at my bank account. Next, my calendar and my life. I realized I was working 60-hour weeks to take home less money than I did three years earlier when the business was half the size.

Something wasn’t adding up.

When Revenue and Profit Tell Different Stories

Here’s the thing they don’t tell you about scaling a business: revenue and profit are not the same thing.

Growth and success are not the same thing, and working more hours doesn’t mean you’re making more money.

I’d fallen into the trap most business owners fall into. I confused being busy with being successful. We were growing, revenue was up, and we had more clients, projects, and team members.

From the outside, it looked like we were crushing it. From the inside? Growth without profit is just expensive chaos.

The Question That Changed My Perspective

One day, a mentor asked me something that stopped me cold: “How much are you actually making per hour?”

I didn’t know. I’d never calculated it. So he walked me through the math:

Revenue – Expenses = Profit
Profit ÷ Hours Worked = Your Effective Hourly Rate (EHR)

I grabbed a calculator, did the math, and my jaw dropped.

After accounting for all expenses and dividing by the hours I actually worked (not the hours I wished I worked), my Effective Hourly Rate was $38/hour as a W-2 employee. Certainly there were a few more dollars for me when it came to bonuses and distributions, but it wasn’t significant.

Thirty-eight dollars per hour. Running a million-dollar business.

A high-level Costco manager makes more than that. With benefits and weekends off. And no stress about payroll.

I knew I needed to make a change.

Why Your EHR Matters More Than You Think

Most business owners have no idea what they actually make per hour. They know their revenue. They know their profit (maybe). But they don’t know their Effective Hourly Rate.

And that number? That’s the truth. Because you can have great revenue and still be broke. You can be “busy” and still be underpaid. You can work 70-hour weeks and make less per hour than someone working 40.

Your EHR tells you if your business is actually working. Not just for your clients or on paper, but for YOU.
If your EHR is lower than what you could make working for someone else, your business isn’t serving you. It’s using you.

How to Calculate Your Effective Hourly Rate

Here’s the formula. Grab a calculator and do this right now.

Step 1: Calculate How Much Money You Actually Made
How much money did you make (not revenue, but what you actually took home)
Include:

• Your salary/paycheck from the business
• Any bonuses or distributions you received
• Profit you kept in the business that’s yours

This is your total compensation from your business for the year.

Step 2: Calculate Your Actual Hours Worked

Be honest here. How many hours do you actually work per week? Not the hours you’re “at work”. The hours you’re actually working. Include:

• Client work and delivery
• Sales and marketing
• Admin and operations
• Strategy and planning
• Evenings and weekends when you’re “just checking email”

Multiply that by 52 weeks (or however many weeks you actually worked). That’s your annual hours.

Step 3: Divide Money Made by Hours Worked

Total Money You Made ÷ Annual Hours Worked = Your Effective Hourly Rate

That’s what you’re actually making per hour. Not what you think you’re making or what you tell people. What you’re actually making.

Filtering Every Decision Through One Lens

Once you see your Effective Hourly Rate, you can’t unsee it. And suddenly every decision becomes clearer.

Every decision you make should be filtered through this question: “Does this increase or decrease my effective hourly rate?”

• “Should I take this client?” → What’s my hourly rate on this project?
• “Should I build this offer?” → Will this increase or decrease my effective hourly rate?
• “Should I hire someone?” → Will this free up my time for higher-value work?

It’s not about revenue anymore. It’s about profit per hour. That’s the only number that tells you if your business is actually worth your time.

What Changed When I Started Optimizing for EHR

Once I calculated my EHR and realized I was making $38/hour, everything changed. I stopped obsessing over “more revenue” and started asking better questions:

What if we focused on profitable clients instead of all clients?
We fired the bottom 20% of clients who were high-maintenance and low-margin. Revenue dipped slightly. Profit went up significantly.

What if we streamlined our offers so the team wasn’t stretched thin every day?
We cut three services that “looked good” but were a nightmare to deliver. Margins improved overnight.

What if we stopped customizing everything and built repeatable, scalable packages instead?
We templatized our core offerings. Delivery time dropped by 40%. Quality went up. Team was happier.

What if we tightened operations so every hour actually moved the business forward?
We documented processes, trained the team, eliminated waste. Suddenly we could handle 30% more volume without adding headcount.

The result? The next year, I took home more money than I ever had while working 30 hours a week. Because I stopped chasing revenue and started chasing profit per hour.

Six Questions That Actually Move the Needle

Most businesses are playing the wrong game. They’re asking: “How do I grow revenue?” when they should be asking: “How do I grow profit without sacrificing my life?”

Here are the questions that actually matter:

1. What’s my current EHR?

Run the math and be honest. That’s your starting point.

2. What’s my goal EHR?

What would make this business worth it for you? $100/hour? $200/hour? Pick a number.

3. What’s killing my margins?
Which clients, services, or processes are eating profit? Cut them.

4. What could I charge more for?
Where are you underpriced? Where could you 2x your rate and still win the work?

5. Where am I wasting time?

What are you doing that could be delegated, automated, or eliminated?

6. What would happen if I did less?
What if you cut your service menu in half and only kept the most profitable stuff?

Rethinking What Growth Actually Means

Most entrepreneurs think growth looks like more clients, more revenue, and more team.

But real growth looks like more profit, more margin, more time, and more freedom.

You don’t need to do more. You need to do less of what doesn’t work and more of what does.

Charge more, cut the fat, and get ruthlessly focused on what actually makes money. That’s the game.

Run Your Numbers (It Takes 5 Minutes)

Stop reading and grab a calculator. Pull up your financials and be honest about your hours.

Run the math. If you don’t like what you see? Good. Now you know what to fix. Start with one thing:

• Fire one unprofitable client
• Raise prices on one service
• Cut one thing you’re doing that doesn’t make money
• Automate one time-wasting process

Do that this month, then calculate your EHR again in 90 days.

Watch what happens when you stop chasing revenue and start chasing profit per hour.

Your business should serve your life, not consume it. If your EHR says otherwise, it’s time to change the game.

if this concept resonates with you, and you have questions, I keep a few 15-minute calls open each week. Happy to talk it through. Click here.