Should You Build Profit or Build Wealth?—Ruth King, CEO, Business Ventures Corporation

We’re sure you have heard people talk about building a profitable business and you have probably also heard about building wealth. But, when have you heard about these topics combined to make sure you are building a profitable and wealth-building company?

Our guest today, Ruth King, is a profitability and wealth-building expert! I have had the good fortune of being a guest on Ruth’s Profitability show about five years ago and I am so grateful she was willing to give some of her time to be a guest for us. The video link is included in the show notes.


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Ruth has written five books-two have become #1 bestsellers. One of her biggest achievements was helping a client with $750,000 in annual revenues. Sixteen years later, they sold the business for $9 million in cash.

After twelve years on the road and, doing 200 flights per year, Ruth knew there had to be a better way to reach business people who wanted to build their businesses and train their employees. She began virtual training on the Internet in 1998 and then launched the first television online broadcasting in 2002. Ribbon, the first online broadcasting network, began operations in January 2007. Ribbon channels currently include and

She was the founder of the Decatur, Georgia branch of the Small Business Development Center in 1982. She also started the Women’s Entrepreneurial Center and developed and facilitated a year-long course for women who wanted to start their own businesses. This course was the foundation for one of the classes at the Women’s Economic Development Authority in Atlanta, Georgia.

More recently Ruth was the instructor for ICE, the Inner City Entrepreneur program in conjunction with the Small Business Administration. This 16-week course taught business owners with at least $400,000 in revenues (and many had over $1,000,000 in revenues) how to grow their businesses to the next level. A large part of the curriculum was aimed at improving and understanding the financial knowledge.

Ruth holds a Masters in Business Administration in Finance from Georgia State University. She also holds Bachelor’s and Master’s Degrees in Chemical Engineering from Tufts University and the University of Pennsylvania, respectively.

Ruth is passionate about helping adults learn to read, photography, and running marathon races. She helped start an adult literacy organization in 1986 that currently serves over 1,000 adults per year, and she’s run the Boston Marathon and 9 other marathons so far…


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Tom DuFore, Big Sky Franchise Team (00:01):

You’ve worked hard to build your business, and now it’s time to grow. Welcome to the Multiply Your Success podcast. I’m your host, Tom DuFore, CEO of Big Sky Franchise Team and a serial entrepreneur. The purpose of our podcast is to give you a weekly dose of inspiration and education to help you multiply your success. As we open today, I’m sure you’ve heard about experts and people talking about building profit or other experts talking about building wealth. When have you heard someone talk about both of these topics combined, about building your profitability and building wealth all at the same time?

Tom DuFore, Big Sky Franchise Team (00:43):

That’s why I’m so excited to have our guest today, Ruth King, who is a profitability and wealth building expert. I’ve had the good fortune of knowing Ruth for several years now. I actually was interviewed on her show several years back, and I’m so grateful she was willing to give some of her time to be a guest on our podcast. By the way, if you want to see that interview that I was able to do with Ruth, we have a link in the show notes there. Ruth has written five books, two of which have been number one bestsellers. And she talks about one of her biggest accomplishments, taking a small business grossing under a million dollars and 16 years later, that company sold for over $9 million in cash. Pretty cool success story. So let’s go ahead and jump right into my interview with Ruth King.

Ruth King, Business Ventures Corp. (01:32):

Thanks, Tom, first of all, for having me. I’m thrilled to be with you. I’m looking forward to sharing a lot about profits and profitability with your viewers and your listeners, because, yeah, if you’re going to be a franchise and want to have a franchise and have a successful franchise, first, your business has to be profitable on a continuous basis. And you want your franchisees to have profitable businesses on a continuing basis because they will help promote you, “This is doing really well.” Everything snowballs up, making sure that profits are there.

Ruth King, Business Ventures Corp. (02:04):

I recently changed my title to Profit and Wealth Shark rather than Profitability Master for a lot of different reasons, but it’s really not only profit. Profit is the first part of it, and wealth is really the second part of it. So once you’re profitable, you’re going to build wealth. Now, if you are a franchisor, you’re going to build wealth through your franchisees and your franchisees’ customers. If you’re a franchisee, you’re going to build wealth through your customer base, that type of thing. So profitability is first, and then after profits comes building wealth. It’s impossible, I shouldn’t say impossible, it’s really difficult to build wealth without profits, because profits turn into cash, which gives you the ability to build wealth, build customer bases, do the things that are there.

Ruth King, Business Ventures Corp. (02:52):

A lot of people ask me, “Well, can’t we just build wealth? Can’t we just not worry about the wealth piece and worry about the profitability piece?” I will tell you now, and the reason being is that COVID proved it to us, I had contractors that I work with and customers I work with who had 80% of their business in restaurants. What do you think happened to the restaurants? Yeah, they’ve had to go to takeout and everything else like that. So if they didn’t pivot, even though they had very, very profitable businesses, they would be out of business. So, I mean, just looking at that as a result of COVID, the rule is no more than 20% of your revenues from one customer or 20% of your revenues from one industry. So those of you who are franchising, look at different possible industries that you can get into and the franchisees need to follow how you get into those specific industries.

Tom DuFore, Big Sky Franchise Team (03:49):

Wow. Brilliant and great advice. I’m curious just to learn and know about this, but if you could share how you became the profitability and wealth-

Ruth King, Business Ventures Corp. (04:05):


Tom DuFore, Big Sky Franchise Team (04:05):

… expert here. How did you come to this point?

Ruth King, Business Ventures Corp. (04:09):

Well, it actually started when I was in grad school. My background is actually chemical engineering. I have two degrees in chemical engineering. When I went back to school, because I realized I didn’t want to be a chemical engineer for my entire life, and I always wanted to have my own business, and I went through all of the financial classes and all the accounting classes, and I went, “This is easy!” I mean, don’t forget, my math is chemical engineering math and all this advanced stuff. And everybody’s going, “This is hard,” and I’m looking at them going crazy. I found that I had a knack of being able to explain it to people in English rather than necessarily accounting babble, and that’s how it all started. It really and truly did start that way.

Ruth King, Business Ventures Corp. (04:50):

Then my first clients, I got them profitable and we grew them. And so then the reputation starts and the speaking starts and all the writing starts and, yeah, it just builds. I’ve been doing this for about 40 years now. So my first client was a florist and she had called me simply because her P&Os said that she was profitable every month and she was having cashflow problems. Very typical. And so I went in there. Remember, this is the days before QuickBooks, okay? I mean, some of you can’t imagine the days before QuickBooks, but it’s the days before QuickBooks. She had this accounting firm or this bookkeeping firm doing her books, and whenever they didn’t understand where something went, they put it in miscellaneous sales, to make a long story short. So she always was profitable. I gave her some of the things to ask questions about. She fired them.

Ruth King, Business Ventures Corp. (05:42):

And so back in the day, there were no online classes or anything like that. I made her go and do a bookkeeping class, which she said was the six most miserable weeks of her entire life. But she came out of it with the ability to know when something looked wrong. And so I never ask the business owners to become the bookkeepers. I do ask them to make sure that they oversee everything and be able to spot minor issues before they become major crises. So that’s a very long-winded answer, but that’s how the whole thing started. It’s like, okay, to me, the financial piece was really, and always was, very easy because of my background. As a result, I found I was really good at explaining it and I got a lot of companies profitable. I got a lot of them building wealth. And I mean, it literally has snowballed over 40 years.

Tom DuFore, Big Sky Franchise Team (06:35):

Wow. Amazing. And an author of several books and an expert on the subject and just helping lots and lots of businesses improve their own profitability and business owners improve their wealth over that time.

Ruth King, Business Ventures Corp. (06:50):

Yeah, absolutely. It’s been fun. I’ve loved it. I love seeing the light bulbs go on with my clients and even the people who sit in my classes or read my books. I get these wonderful emails, “I thought this was going to be really hard. You made it easy.” I do try to make it easy. I really and truly do.

Tom DuFore, Big Sky Franchise Team (07:06):

Well, fantastic. And so now circling back here, you talked about, we help companies franchise their business and help franchisors grow their brand, and that’s part of where we get involved. You talked about a small business or a company thinking about franchising, they need to make sure they’re profitable. So talk about that and what you mean on profitable and, in your view, what that means.

Ruth King, Business Ventures Corp. (07:34):

All right. So I look at profitability a little bit differently probably than most people, because, number one, I don’t believe in percentages, because you can’t take a percentage to the bank. The only thing you can take to the bank are what? Dollars, right? Can you imagine going to the teller and saying, “Here’s my 10% for this year. Would you deposit it in my account?” They’d look at you like, “What? Are you crazy? No. Get out of here.” Yeah.

Tom DuFore, Big Sky Franchise Team (07:55):

That’s right.

Ruth King, Business Ventures Corp. (07:56):

So I look at everything in terms of dollars. I look at everything in terms of, for every billable or revenue producing hour, how much actually drops to the bottom line? So it’s dollars, it’s not the percentages. So, I mean, I can show you two clients, both of which who had “a 10% net profit.” One of them was earning $10 net profit per hour and the other was earning 50. Which would you rather be? And so look at profitability in terms of actual dollars, not necessarily percentages. And that actually goes up the line. So all of us have overhead, right? We have to pay our rent. We have to pay our light bill. We have to pay the person who answers the phone for accounting and marketing and stuff like that. That should be a number. So for every billable hour, you have to add a certain dollar amount of overhead to everything, right?

Ruth King, Business Ventures Corp. (08:55):

And so between those two pieces, we have a net profit, we add our overhead cost per hour. That gives us our gross profit per hour. Then you add your direct cost and then you get what you should sell your products for. I mean, I work it backwards. I don’t necessarily start, “Okay, here’s sales. Here’s our bottom line.” I start at bottom line, “What do you actually want to earn for every hour that you produce revenues?” This is a hard question for most people because you don’t think about it that way. We think about it, I mean, if you look at Wall Street, you look at most of the franchises, they look at a specific bottom line. Tom, you know that better than anybody. As a percentage.

Ruth King, Business Ventures Corp. (09:32):

But the reality of it is, “Okay, what does that actually mean? Does that percentage mean we’re earning $100 net profit per hour? Or does it mean we’re earning $2 net profit per hour?” You as a franchisor need to know that. Your franchisees need to know that, because then you can work backwards to determine how much sales do you have to generate to get the net profit that you actually want? And so, Tom, if had expected this to be your plain vanilla profitability discussion, I’m sorry, but this is how I do it, and it really, truly works well.

Tom DuFore, Big Sky Franchise Team (10:08):

Yeah. No, this is fantastic. This is exactly why I was excited to have you on the show because I love how you approach things and your enthusiasm about it. Thinking about the next step, you mentioned the franchisor. Now the company franchises, now they’ve got franchisees out there, or maybe a franchisor is listening in and saying, “Okay, this is great, Ruth. And now I’m working here with franchisees.” Is it the same process that you take them through? How would you go about recommending they move forward with that?

Ruth King, Business Ventures Corp. (10:39):

All right. So you’ve got a franchise document that you’ve got to produce anyway, right, in order to be able to do it for projected earnings. But we can’t guarantee them. So you do that with the percentages and everything else like that because nobody will get net profit per hour. But when you actually get your franchisees in, we say, “Look, this is the net profit per hour we generally get, and this is how we got to that number. We expect that you should be able to do this or more, and here is how you do it.” So we look at it from the bottom line and say, “Okay, this is what we want. This is what your overhead cost per hour needs to be. And if it’s not, we have to figure out whether it’s too high or too low. I mean, if it’s too low, what are you doing that we can share with other franchisees? If it’s too high, what expenses do you have in there that maybe could be reduced?”

Ruth King, Business Ventures Corp. (11:30):

So we have an average overhead cost per hour for all the franchisees and they can look at where they are versus everybody else. Now, granted, the differences in rent between New York and South Texas, for example, are going to be different. I understand that. So, I mean, you’re going to have some things that are not going to be exactly the same. But as a general rule, the overhead costs per billable hour or for revenue producing hour should be about the same for all of your franchisees. I do this a lot, not necessarily with franchisees, but I do it with departments and I do it with branches. So a branch will compete against another branch to see who has the highest net profit per hour or the lowest overhead cost per hour, without really making employees work 60 hours a week or something along those lines. Let’s be real. I mean, let’s be good about what the numbers really need to be and not try to hide things and put things where they don’t belong and stuff like that. I’ve had that happen too over the years.

Ruth King, Business Ventures Corp. (12:33):

So, I mean, essentially what we want to do is we want your franchisees to have a certain net profit, and they have to be happy with that net profit, and net profit dollars, I’m talking about, and say, “Okay, how many hours is it going to take to generate that net profit?” And if we can do more than those hours, guess what? Net profit dollars go up. If we do less, net profit dollars go down. So that’s how I look at it.

Tom DuFore, Big Sky Franchise Team (13:01):

Yeah, yeah. I really, really like that approach. I guess, if someone’s listening in, and even for my own purposes, I’m thinking about it, how do you start that process for figuring out these cost per hour, revenue per hour? I like how it seems like a pretty simple number, but it doesn’t sound so simple to get there. So how do you-

Ruth King, Business Ventures Corp. (13:27):

Actually, it is.

Tom DuFore, Big Sky Franchise Team (13:28):

… talk people through that?

Ruth King, Business Ventures Corp. (13:30):

It actually is pretty easy. Okay. Whatever you’re using for your payroll service, whether you’re using an outside service like ADP, Paychex, Insperity, whatever else it is, they produce a report for you that says number of hours, payroll cost. Right? And they actually use it. They’ll take out vacation hours and holiday hours and sick hours and stuff like that. So you can see the actual number of hours that are “used to produce your products and services.” All right? So you take those number of hours, assuming it’s not an overhead person, like a person answering the phone or something like that, and you divide that into your net profit and that’s your net profit per hour. It’s that easy.

Tom DuFore, Big Sky Franchise Team (14:17):

Okay, okay. Pretty straightforward. I like it. I like it.

Ruth King, Business Ventures Corp. (14:22):

Yeah. And the thing is, you find out what it is, because the first time you do it… I mean, I’ve worked with four, five, 10, $20 million companies, and then we do this number and it comes out to $4.17 an hour. I’m not kidding. The owner was shocked to say the least, because he’d always looked at the percentage on the bottom line. And it wasn’t as high as he wanted, but he didn’t realize he was actually earning $4.17 an hour. And that, to him, was totally unacceptable. It would be to me too, but some of the people who are listening are going, “Hey, I only want to earn $4.17 cents an hour.” That’s not me. That’s not what I wanted to do.

Ruth King, Business Ventures Corp. (15:03):

Then we have to figure out, okay, who’s doing really well from a dollar perspective? And let’s figure out what their net profit per hour is. Then we have to figure out, okay, where do we want it to be? All right? What’s realistic. Right? The likelihood of it being $300 net profit per hour for most of us is probably not reality, but maybe 100, maybe 50. Figure out where the group as a whole… I mean, you have a franchisor with lots of franchisees, I mean, cool, figure it out. Let’s see where the group is. Somebody says, “I’m at $38.52,” and somebody says, “I’m at $2.47,” they should talk, figure out what’s going on.

Tom DuFore, Big Sky Franchise Team (15:46):

Yeah. Well, it’s just the idea behind it makes so much sense and it really makes it a lot easier to accurately compare and see what’s really happening and going on.

Ruth King, Business Ventures Corp. (15:57):

Yeah, absolutely. Absolutely, yeah. That’s why I say percentages don’t work. You can have two guys with a 10% net or two companies with a 10% net, one’s doing really well from a net profit perspective and one’s not even earning as much as you could in a fast food restaurant.

Tom DuFore, Big Sky Franchise Team (16:12):

Ruth, this is a great time. I’d love to transition here. We ask every guest the same four questions before they go. First question we always ask is just about a miss or two that’s come along the way and something you’ve learned from it.

Ruth King, Business Ventures Corp. (16:25):

Okay. Miss number one, I mean, and we can talk about this one for hours, but my favorite miss is employees can read your mind. All right? And obviously, it has nothing to do with profitability, but it does, because you have in your head the way you want to do it, or you have it on your paper for you, but you don’t explain it and you don’t explain what you want. You don’t explain what you want to your managers. You think they can read your mind. They can’t. Your employees can’t. You have to be very specific, even if it’s written in an operations manual, “I want you to do this: A, B, C, D.” Because you get frustrated, they get frustrated and, “Why don’t you tell me what you want?” So, that is my favorite miss. I’m sorry, it’s not financial, but it’s reality. Yeah.

Tom DuFore, Big Sky Franchise Team (17:10):

Yeah, yeah. Oh gosh. Yeah. I’ve seen that happen with my own self many times. So whether it’s been not communicating or wondering, before I was self-employed and running my own business, looking and wondering, “What does my manager or boss want? I don’t know.”

Ruth King, Business Ventures Corp. (17:34):

Exactly. “I mean, what am I supposed to be doing?” I mean, you have an overall sense because they hired you to do something, but, “How do I know whether I’m doing a good job or not?” Because a lot of managers just don’t say. They only tell you when you do anything wrong, things wrong. They don’t tell you when you’re doing good. But, “Here’s what I’m supposed to be doing. Here’s where my progress is. Here’s where my numbers are.” And now this is where the numbers come in with performance, key performance indicators. And so you know, and your manager has told you, or the owner of your business has told you and said, “This is the minimum acceptable,” whatever, “phone calls, responsive with respect to the net profit per hour and whatever, that you have to achieve if you want to keep your job.”

Tom DuFore, Big Sky Franchise Team (18:19):

Well, and how about a make or two that you’d like to share?

Ruth King, Business Ventures Corp. (18:23):

Okay. This also is not exactly numbers, but the startup of my sixth business was the most incredibly difficult startup that I ever had. We had a $1.6 million contract, $800,000 investment riding on that contract. And we had already started the work towards it. They called us on the phone one day and said, “We dropped the contract.” This was how we were going to start up this business, and I had invested a lot of money in it also to get everything ready. So I put the last $25,000 on my credit cards and we started with eight customers. That was 2001, 2002, and it’s still going today.

Ruth King, Business Ventures Corp. (19:10):

So, yeah, it might be, you pick yourself up, you dust yourself off and you keep going. It was the reason I wrote my first book, which was The Ugly Truth About Small Business, because I went through hell. Excuse me for saying it that way. And I found 50 other business owners who had gone through other horrific experiences who were willing to share. So that anybody who reads that, number one, knows they’re not alone. Number two is they can avoid doing mistakes that we made, not that they’re going to not make them, but they’ll make others, but why do the stuff we did wrong? And so that really started my first book. But it was an incredibly stressful and intense period that I look back now on and going, “If you did that, you can do anything.” So, that was from the business standpoint.

Ruth King, Business Ventures Corp. (19:59):

Then from a personal standpoint, I started running marathons. I ran my first marathon three weeks before my 46th birthday. Then I ran two Bostons. I tell you, running Boston was the hardest thing I’ve ever done physically. So if I know I can handle it from a business perspective, I know I can handle it from a physical perspective. I’m cool. I’m bad.

Tom DuFore, Big Sky Franchise Team (20:19):

All right. All right. Well, and how about a multiplier, Ruth?

Ruth King, Business Ventures Corp. (20:23):

Yeah. My favorite multiplier is actually a company, or an owner of a company, who has done phenomenally well. All right? Because everybody’s looking up to this person going, “How’d you do that?” because they want to do it too. And so, I mean, I get a lot of my referrals because of all the successes that my clients have had. So my multiplier is a customer who’s done phenomenally well, who talks, and everybody goes, “How’d you do that?” And then that’s how they talk to other people and talk to other people and talk to other people. That’s literally how I’ve built this business. So, that’s my multiplier.

Tom DuFore, Big Sky Franchise Team (21:02):

I love it. I love it. The last question we like to ask every guest before they go is what does success mean to you?

Ruth King, Business Ventures Corp. (21:11):

Success, to me, is happy clients who are doing really well, achieving the goals that they want to achieve, building profits, building wealth, and giving back. Now, the giving back is really important to me and I do that myself. But if you’ve made it, you got to give back. That’s the way I look at it.

Tom DuFore, Big Sky Franchise Team (21:30):

Yep, yep. Yeah, we do the same here as well. We make sure that we’re giving back to the community and supporting. Absolutely. I think that’s important. Well, Ruth, tell me, I guess, drawing to a conclusion here, I’m wondering, is there anything you were hoping to get across or share that you haven’t had a chance to say yet?

Ruth King, Business Ventures Corp. (21:52):

Well, yeah. Financial statements and understanding them takes less than 30 minutes a month. It’s actually easy once you get the hang of it. I have a free report if they want and it’s on my website. All you got to do is download it. It shows you where the mistakes are in financial statements in as little as 60 seconds. So if they want that, they can just go to and click on the report and get it. I mean, I share that with everyone because, number one, not everyone can use my services or want to use my services, and there’s a lot of really good people out there. The thing is to understand what’s going on. It is very easy once you get the hang of it. You’ve all done harder. I mean, some of you play golf, some of you play tennis. Some of your businesses took a lot of technical knowledge to learn it. I promise you that was harder than learning a financial statement.

Tom DuFore, Big Sky Franchise Team (22:44):

That’s great. And so that’s at, is that?

Ruth King, Business Ventures Corp. (22:48):

Mm-hmm (affirmative).

Tom DuFore, Big Sky Franchise Team (22:48):

What’s the name of the download?

Ruth King, Business Ventures Corp. (22:50):

The download is How to Discover Whether Your Financial Statements Are Wrong In As Little As 60 Seconds.

Tom DuFore, Big Sky Franchise Team (22:57):

Ruth, thank you so much again for being a guest and for giving us such a great interview. Let’s go ahead and jump into our three key takeaways. The first key takeaway is when Ruth was talking about needing to build wealth and profitability together, that they are not exclusive of one another. They actually work hand-in-hand. And having an idea of how you’re going to do both at the same time makes a lot of sense. That’s her specialty. That’s what she helps small businesses and other companies do.

Tom DuFore, Big Sky Franchise Team (23:28):

Takeaway number two is that business owners need to be able to understand the financials of their business and how to make decisions with that information. So it’s one thing to understand it, but it’s another thing to make a great decision with it. Takeaway number three is when Ruth talked about how one of the misses throughout her career that she experienced at some point was thinking that employees can read your mind. I don’t know if you’ve ever experienced that, but I know I can raise my hand and say, “Sure, that’s happened to me before.” And not only your employees, but also if you’re in the franchising business, your franchisees cannot read your mind as well. And so you need to make sure you’re communicating, explaining to them about what’s going on and how to do it.

Tom DuFore, Big Sky Franchise Team (24:19):

Now it’s time for today’s win-win. So today’s win-win is look to find your average net profit per hour, and that it should be pretty similar amongst all of your locations, franchises, territories, or other branches within maybe a large enterprise. This is something that will make it much easier for you to accurately compare one territory, or one franchise, or one location to the next. So make sure you’re taking a look at the average net profit per hour. I thought that was a phenomenal takeaway.

Tom DuFore, Big Sky Franchise Team (24:59):

And so that’s the episode today, folks. Please make sure you subscribe to the podcast and give us a review. And remember, if you or anyone you know might be ready to franchise their business or take their franchise company to the next level, please connect with us at Thanks for tuning in, and we look forward to having you back next week.

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