Profits are pretty simple to understand. It’s just revenue minus expenses. If you make a lot of sales and manage your expenses well, your business will be profitable. So why do so many entrepreneurs struggle when it comes to creating profitable businesses?

To start a successful business, you need to have a really solid understanding of how your business is going to make money. This means constructing and stress-testing your business model from a profit-focused perspective. Here’s something you might not realize: Most entrepreneurs never bother to do this.

When the vast majority of people start a business, they aren’t thinking about how it will turn a profit. They’re excited about the business concept itself, and energized by the notion of starting a new venture. What they aren’t thinking about is the cold, hard details of making sure the business brings in more money that it takes to operate.

Creating a clear path to profitability isn’t hard to do, but it does require some serious thought and a little research. Most of what’s involved is simply the common-sense stuff of knowing how businesses operate, and taking some time to look at the various models they use to turn a profit. There aren’t that many successful business models out there, and it’s usually not too difficult to find one that’s a good fit for your business. There are tons of great resources out there for learning how these models work in practice.

Even if your assumptions turn out to be wrong, and the business model you’re trying doesn’t generate a profit, it’s not a disaster. You can always pivot. That may sound like just another a buzzword, but it’s actually one of the most powerful tools available to a startup. Pivoting means making a “course correction” to your business model, allowing you to move in a new, more profitable direction.

For early stage businesses, becoming profitable also means putting everything you’ve got into building sales. Without sales, there’s no cash coming in. No revenue means you’re not profitable, forcing you to rely on your startup capital to keep the lights on. Once that money is gone, it’s game over. Sales gives you a way to control your own destiny.

A big part of creating that profitable model is building a sales pipeline. Filling that pipeline with leads should be a top priority, particularly for new companies. It’s no accident that one of my favorite sales expressions is “If you didn’t add anything to your pipeline today, you’ll have no sales tomorrow.”

Raising revenues is a big part of creating a profitable business, but it’s not the only element. The flip side of the profit equation are the expenses, and you want to keep those as low as possible. Even on those expenses that are directly related to generating sales, you don’t want to spend more money than you absolutely have to. Leveraging technology can be a great way to reduce expenses, particularly when it comes to sales.

Early in my career, I was an enterprise sales rep. I was based in Chicago, but I was working in a lot of other markets, like Ohio and Wisconsin. I traveled almost every day of the week, either in a car or on a plane, all on the company’s dime. The company was easily spending $1,000 per week, just so that I could have some face time with our clients.

One of my colleagues from that era is now a global VP of sales for a very big company. Not all that long ago, I was talking to him about his job, and he told me that things are completely different today. Most of those formerly in-person meetings are now done on Skype. A rep based in Florida could have a sales territory in Oregon, and may never need to see in the inside of an airport.

Why is this the new standard? It’s all about reducing the sales expense. If you can cut your travel costs, reduce the amount you spend wining and dining prospects, and generally keep your costs low, you’ll be in a much better place when it comes to profits.

Profitability doesn’t begin and end with sales, however. There’s also a very good argument for bootstrapping your business for as long as possible. What does bootstrapping mean, and why is it important? I’ll cover that, and more, in part two.