The Rachel Hollis Podcast

933 | 5 Decisions That Will Make or Break Your Business This Year

February 9, 2026

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  • Business owners must obsess over profit margin and cost reduction rather than solely focusing on revenue to ensure financial viability and personal income. 
  • To increase business revenue, focus on increasing customer transaction frequency and average customer spend (through upselling and retention strategies) before chasing new clients. 
  • The success or failure of a business is directly tied to the psychology and continuous self-improvement of the leader at the top, requiring a scheduled plan for personal growth. 

Segments

Profit Over Revenue Focus
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(00:06:28)
  • Key Takeaway: Focusing solely on revenue without understanding costs leads to owners not bringing home personal income.
  • Summary: Revenue is all money brought in, while net revenue is what remains after costs of goods sold and expenses; this net revenue is the owner’s margin. New businesses often incur debt by spending based on gross revenue, not accounting for the true cost to generate that income. Lowering costs of goods sold increases take-home pay without needing to increase revenue.
Gross vs. Net Revenue Explained
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(00:07:57)
  • Key Takeaway: Gross revenue is total intake; net revenue is the actual profit left after all business costs are subtracted.
  • Summary: Gross revenue is all money received without subtractions, which Rachel Hollis humorously remembers as ‘so gross.’ Net revenue is what is left after costs of goods sold, ads, staff, and taxes, visualized as fish caught in a net. For small business owners, net revenue is the margin that supports personal income and reinvestment.
Cash is Queen Principle
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(00:13:48)
  • Key Takeaway: The number one reason businesses fail is running out of cash, making cash flow more critical than booked revenue.
  • Summary: Cash is queen, not king, because money owed (accounts receivable) that isn’t paid immediately can lead to business failure before the work is compensated. It is essential to ensure cash is inside the business to maintain operations, even if revenue figures look high on paper.
Increasing Customer Transaction Frequency
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(00:22:54)
  • Key Takeaway: Service businesses must implement automated systems to ensure clients return on a regular schedule to maximize transaction frequency.
  • Summary: There are three ways to increase business money: increase customers, increase transaction frequency, or increase customer spend. For service businesses like salons, failing to have a process to ensure regular rebooking means missing out on significant revenue. Simple automation for scheduling or training receptionists to book the next appointment before checkout is crucial.
Maximizing Customer Spend via Upselling
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(00:32:22)
  • Key Takeaway: Retail environments should leverage the customer’s ‘in state’ shopping mindset at checkout with high-margin impulse buys.
  • Summary: The checkout line is a prime opportunity to increase customer spend because shoppers are excited and less critically thinking. Train staff to upsell the item with the highest profit margin, not just the most popular item. Even small, $5 additions per transaction can result in significant daily revenue increases.
Leadership Psychology and Growth
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(00:36:12)
  • Key Takeaway: Business success is determined by the psychology of the leader, necessitating continuous personal growth and learning.
  • Summary: All success or failure in a business results from the psychology of the person at the top; staying the same person keeps the business stagnant. If you want to scale, you must acquire new knowledge through scheduled learning, coaching, or masterminds. Leadership behavior is the strongest predictor of organizational performance, with 70% of team engagement tied to the manager.
Direct Customer Access Necessity
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(00:41:56)
  • Key Takeaway: Relying on social media for customer acquisition means you do not own those customers; direct access via email or SMS is mandatory for business stability.
  • Summary: If you are not paying to access a platform, you are the product being sold to advertisers. Social media algorithms can change, instantly limiting reach to the audience you spent years building. A business must have a direct communication channel, like an email list or SMS, to ensure customers receive promotions and updates.
Financial Clarity and Measurement
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(00:49:02)
  • Key Takeaway: Business owners must stop using ‘I’m bad with numbers’ as an excuse and actively measure key financial metrics to make confident decisions.
  • Summary: Uncertainty breeds stress, but clarity creates confidence; avoiding numbers only increases anxiety. Owners must know their monthly operating costs, profit margins, and cash runway (how long the business can survive without new income). If you are not willing to look at your Profit & Loss statement, you should not be in business.