They reported an $80 billion loss, and you’re beating yourself up about your business margins?

That’s Anthropic, the company behind Claude, and the figure is a half-year loss in its draft prospectus, mostly a non-cash accounting charge (Quartz).

I’m not telling you this because you need to care about AI company finances. I’m telling you because it proves something I wish every business owner I work with believed: success has many definitions, and you get to choose yours.

Quick answer: To define business success, decide what “enough” looks like for you before you chase a number. I use two measures: a healthy profit margin and a lifestyle I choose. Then work backwards to the exact number of sales and people you need. The free calculator below does the maths for you, including churn if you sell memberships or subscriptions.

TL;DR

• Stop measuring yourself against someone else’s scoreboard. A quiet month or a thinner margin than you hoped doesn’t make you a failure.
• But profit still matters. You don’t have investors covering your losses. Your profit is your safety net, your tax money and your freedom.
• My definition of success: a healthy profit margin plus a lifestyle I choose.
• Score yourself with my five-part success scorecard: profit margin, cash and tax calm, lifestyle, energy and impact.
• Protect your profit with a simple Profit First system. It took me from crying in my car over a tax bill to a tax account $38,000 in credit.
• Know your number with the free calculator: how many sales, members and people you need to hit your goal.

What’s in this guide

1. Why you need your own definition of success
2. How I define success: profit margin plus a lifestyle I choose
3. My five-part success scorecard
4. The money system that changed everything for me
5. Work backwards from your number (free calculator)
6. Worked examples: one-off services and memberships
7. What to do when your number looks scary
8. Plan your profitable year
9. FAQs

Why you need your own definition of success

I talk to business owners every single week who feel like failures.

Not because they’re failing. Because they’re not making the eye-popping profit they think they should be making by now. They scroll past someone’s “six figures in six weeks” post and quietly decide they’re behind.

For you, success might be:

• Paying yourself properly for the first time
• Taking school holidays off without the business falling over
• Hitting a 30% profit margin
• Never crying over a tax bill again
• Working three days a week from wherever you like
• Building something your kids are proud of

None of those are less valid than a billion-dollar valuation. They’re just different scoreboards. So if you’ve been giving yourself a hard time this year, please put the stick down. You are allowed to define what winning looks like.

Just don’t copy the big-tech playbook. Their losses are planned and funded by investors. Yours would come out of your own pocket, as unpaid wages, juggled bills and a tax bill you can’t cover.

So be kinder to yourself, but don’t use “even the big guys lose money” as a reason to stop caring about profit. For small businesses, profit is oxygen. It’s what lets you keep serving people, keep your prices fair and keep a roof over your head. I wrote a whole piece on why profit matters for purpose-driven businesses, and I stand by every word.

How I define success: profit margin plus a lifestyle I choose

After more than 20 years in business, here’s my definition. It’s simple, and I check it every single month.

1. A healthy profit margin. Not just revenue. Revenue is vanity, profit is sanity, and cash is reality. I want to know that a decent percentage of every dollar that comes in stays in.

2. A lifestyle I choose. My business has to fit my life, not the other way around. If something is profitable but it’s eating my weekends, my energy or my health, it’s not a success. It’s a cost I haven’t measured yet.

That second part is why I recently cancelled some of my most profitable events. I wrote about it in how to measure business success beyond profit, and it’s one of the most liberating decisions I’ve ever made.

If you’re always chasing “more” without ever defining “enough”, you’ll never feel successful, no matter how big the number gets. I unpack that in why your business should fit you, not the other way around.

My five-part success scorecard

Here’s a quick scorecard you can use today. Give yourself a score out of 10 for each one. Be honest.

Anything under a 6 is where your next 90 days of focus should go.

Notice that only one of those five is purely about money. But notice too that the first two are non-negotiable. You can’t enjoy a beautiful lifestyle for long if the money underneath it is a mess.

The money system that changed everything for me

I’m going to be really honest with you here, because I think somebody needs to hear it.

When I first moved to Australia, I arrived with a suitcase full of hope, a head full of ideas and absolutely no idea how the tax system worked here. Business tax. GST. BAS. PAYG. Super. None of it. In England I’d been a training manager on a salary. Tax just quietly happened to me. Nobody sat me down and explained what changes when you’re the one running the business.

So I did what most new business owners do. I worked my butt off, said yes to everything, made money and reinvested whatever was in the account to keep the lights on. I genuinely thought I was doing well.

Then, after my first 18 months, the tax bill came. It was the biggest tax bill I had ever seen in my life. Bigger than anything I’d earned in a whole year back in England.

I remember exactly where I was. I sat in my car and I cried my eyes out. Proper, ugly, can’t-catch-your-breath crying. Despair. Fear. And, if I’m honest, a fair bit of swearing at the tax office.

I couldn’t understand how I’d reached the end of the year with almost nothing in the bank, while the government was telling me I’d made a profit. I ended up on a payment plan, with interest on top, and for a long time anything from the tax office made my stomach drop.

The truth I eventually had to face was this: the system wasn’t rigged against me. I simply didn’t understand the money side of running a business yet. And that’s fixable. With education, good advice and systems.

So I made myself completely and utterly responsible for learning it. I read Rich Dad Poor Dad, The Barefoot Investor and Mike Michalowicz’s Profit First. I invested in proper financial literacy training with qualified accountants. And I completely restructured how my money moves.

Here’s the short version of what I do now:

• Every payment lands in one income account first. Everything that comes into the business goes into here.
• Then it’s split into separate accounts for profit, tax, super, owner’s pay and operating expenses.
• Profit comes out first, not “if there’s anything left over”.
• Tax is paid as the money comes in. I asked my accountant what I’d need to pay each week to cover next year’s tax if I earned the same again, and I set up a weekly direct debit to the tax office.

I barely notice it leaving, because I never pretend that money was mine in the first place. It’s just there, every single week, waiting and ready for tax time.

The result? After my latest reconciliation, my company’s tax account was sitting $38,000 in credit. Not a bill. A credit. More than a decade after crying in that car, the tax office is holding my money instead of chasing me for it.

I filmed a video about it, because so many business owners in my world were panicking about tax time. In it I walk through exactly how I set up my accounts on a whiteboard. Here it is:

And yes, some financially savvy people will say that money would be better sitting in a high-interest account until the tax is due. Mathematically, they might be right. But behaviourally and emotionally, this system works for me, my business and my mental health. That credit represents peace of mind. It represents never sitting in my car sobbing over a bill again.

That, to me, is success.

Please remember I’m not a financial adviser, and this isn’t financial advice. Speak to a qualified accountant or registered tax agent about your situation. If you already owe tax you can’t pay, talk to the tax office early. Hiding from it only makes it bigger.

Want help using AI to keep an eye on your numbers each week? Here’s how AI acts as my CFO, operations manager and business analyst.

Work backwards from your number (free calculator)

Once you’ve decided what success looks like, you need to know what it takes to get there.

And this is where most business owners get stuck. They have a vague goal (“I want to make more money”) but no idea how many sales that actually means, or how many people they need to get in front of to make those sales.

So business starts to feel emotional. Every quiet week feels personal.

But it isn’t personal. It’s maths.

I made this calculator so you can stop guessing. It works for two kinds of businesses:

• One-off sales, like services, packages, courses, events or products. It works out how many sales you need, and how many people you need to reach based on your conversion rate.
• Subscriptions and memberships. It adds churn (the people who leave each month), so you can see how many members you need, how many new members you need each month to grow, how many you need just to stand still, and how many leads that takes.

Use the tabs to switch between them. Your numbers stay on your device. Nothing is saved or sent anywhere.

How to use it well:

• Use your real conversion rate if you know it. If you don’t, start with 1 to 3%. That’s a realistic range for most cold audiences online right now. I explain why in how to calculate the audience size you need to hit your revenue goals.
• Be honest about churn. If you lose 5 members a month out of 100, your churn is 5%. Don’t round it down to make yourself feel better. It only hurts later.
• Play with the levers. Change the price. Change the conversion rate. Change the churn. Watch how much difference one small improvement makes.

I also have two older calculators if you’d like to go deeper: one for memberships and subscriptions and one for courses, programs and products.

Worked examples: one-off services and memberships

Here’s how the maths plays out, so you can see what the calculator is doing behind the scenes. These are made-up examples, not anyone’s real numbers.

Example 1: A service business

Mel is a consultant. Her revenue goal is $120,000 a year. Her average package is $1,500, and about 2 in every 100 people who see her offer go on to buy.

• Sales needed: $120,000 ÷ $1,500 = 80 sales a year (about 7 a month)
• People to reach: 80 ÷ 2% = 4,000 people a year (about 77 a week, or 11 a day)
• At a 30% profit margin, she keeps about $36,000 of that.

Now look what happens if Mel lifts her price to $2,000: she only needs 60 sales and 3,000 people. Or if she doubles her conversion rate to 4% with better follow-up: she only needs to reach 2,000 people. That’s why I bang on about raising your prices and automated follow-ups.

Example 2: A membership

Jo runs a membership at $50 a month. She wants $10,000 a month in recurring revenue within 12 months, starting from zero. About 5% of members leave each month, and 2% of the people who see her offer join.

• Members needed: $10,000 ÷ $50 = 200 members
• Average member stays: 1 ÷ 5% = 20 months, so each member is worth about $1,000 over their lifetime
• New members needed each month to get there in 12 months: about 22
• Without any churn, she’d only need 17 a month. Churn costs her 5 extra members every single month.
• Leads needed: 22 ÷ 2% = about 1,100 people a month
• Once she hits 200, she still needs about 10 new members a month just to stand still

That last line is the one that surprises people. A membership never stops needing marketing. This is exactly why watching your churn rate and making your product hard to leave matter as much as getting new people in.

The maths behind the membership numbers: members needed = monthly goal ÷ price. Average lifetime = 1 ÷ monthly churn. New members a month to stand still = members needed × churn. New members a month to grow = (target − current members × (1 − churn)^months) × churn ÷ (1 − (1 − churn)^months). Leads = new members ÷ conversion rate.

What to do when your number looks scary

If the calculator just told you that you need to reach 30,000 people and you currently reach 300, breathe. That’s not a reason to quit. It’s a map.

You have five levers. Pull any of them and the number gets smaller:

1. Raise your price. Fewer sales needed for the same revenue.
2. Lift your conversion rate. Better offers, better sales pages, follow-up emails, testimonials and reviews.
3. Reduce churn. Better onboarding, community and quick wins in the first 30 days.
4. Sell more to existing customers. Upsells, next steps and renewals cost far less than finding new people.
5. Get in front of more people, consistently. Content, collaborations, speaking, SEO and email. Every single week.

And remember the bigger point of this whole article. If the number you thought you needed doesn’t actually fit the life you want, change the goal. A business that hits a smaller number with a 35% margin and four-day weeks may be far more successful, by your definition, than one that hits a huge number and runs you into the ground.

For more on simplifying it all, read why most business owners overcomplicate success and know your numbers: the key to business profitability.

Plan your profitable year

If this has lit a fire under you, here’s where to go next.

• Plan for Profit. My workshop on structuring, pricing and packaging your offers so you actually make a profit, not a loss. It also walks through the Profit First-style money model I use in my business. You can read the Plan for Profit highlights on the blog.
• Map Your Magic. Your master plan and 12-month growth strategy, built with AI, so your revenue goal turns into a clear plan of action. Here’s how Map Your Magic works.
• The Legends Lab. My business coaching program for experts, coaches and course creators who want to grow with tech, AI and automation. Plan for Profit, Map Your Magic and my “How to Profit First your business” training are all in the library, plus live monthly masterminds where we work on your numbers together.

FAQs

How do you define success in business?

Decide what success means for you before you chase a number. I use two measures: a healthy profit margin and a lifestyle I choose. A simple scorecard covering profit margin, cash and tax calm, lifestyle, energy and impact gives you a much fuller picture than revenue alone.

How do I work out how many sales I need to hit my revenue goal?

Divide your revenue goal by your average price to get the number of sales. Then divide the number of sales by your conversion rate to find how many people you need to reach. For example, $120,000 at $1,500 a sale is 80 sales, and at a 2% conversion rate that means reaching about 4,000 people.

How does churn change the maths for a membership?

Churn is the percentage of members who leave each month. Your average member stays about 1 divided by your churn rate, so 5% churn means about 20 months. Churn also means you need a steady stream of new members just to stay where you are: members needed multiplied by churn each month, before you grow at all.

What is Profit First?

Profit First is a cash management approach from Mike Michalowicz’s book of the same name. Every payment goes into an income account, then gets split into separate accounts such as profit, tax, owner’s pay and operating expenses, with profit taken first. Talk to your accountant about the right percentages for your business.

Is a business that makes a loss a failure?

Not necessarily. Funded start-ups often run at a loss on purpose to grow fast. But for most small businesses, a loss comes straight out of the owner’s pocket, so aim for a healthy profit margin while defining success in a way that also includes your time, energy and lifestyle.

This article shares my personal experience as a business owner. It is not financial, tax or investment advice. Always speak to a qualified accountant or registered tax agent about your own situation. The Anthropic figure is as reported on 22 October 2026 from a draft prospectus and may change.