Your Employees Are Clueless About Money—And It’s Costing You a Fortune

Most employees think revenue equals profit. That’s why they do things like:

→ Waste company resources like there’s an endless supply

→ Demand raises without understanding the financial reality

→ Get frustrated when budgets are tight and think leadership is “greedy”

The truth? They’ve never been shown how money actually moves through a business, and how little is often left over in the end.

Fixing this isn’t optional. It’s critical. And it starts with a $100 bill.

The $100 Lesson That Changes Everything

Here’s how to permanently rewire how your employees think about money—and why it disappears faster than they realize.

Step 1: Set the Context

Walk into the room. Hold up a photocopy of a $100 bill. Ask a simple question:

“How much of this do you think ends up as profit?”

They’ll guess—wildly wrong. Some might say 50%. Others, 30%. Most have no idea.

That’s when you pull out the scissors.

Step 2: Slice It Up—And Watch Their Faces Change

Grab a ruler, mark the back of the bill into sections based on the percentage of revenue each of the sections of your profit and loss statement costs the business – COGS, OPEX, G&A (the example below is from doing this exercise in my former hardwood manufacturing business) – and start cutting as you explain:

1. Materials – 25% Gone

• “First, $25 of every $100 we sell goes straight to raw materials to buy the logs we need.”
• Snip. First chunk gone.

2. Direct Labor – Another 25% Gone

• • “Next, payroll for the employees who actually produce the finished product (or deliver the service).”
  • Snip. Another quarter gone.

→ Half the money is already gone. But we’re just getting started.

3. Operating Expenses – 20% Gone

• • “Rent, utilities, software, office staff. Just to keep the lights on.”
  • Snip. Down to $30 left.

4. Sales & Admin Costs – 20% Gone

• • “Marketing, sales, and administrative overhead.”
  • Snip. Now we’re down to just $10 left.

5. Taxes – 40% of Profit

• • “The government wants its cut. Let’s take $4. We can debate about ‘fair share’ another time.”
  • Snip. Now we’re at $6.

6. Reinvestment – 50% of What’s Left

• • “To grow, we need new equipment, technology, and training. Half of what’s left has to go back into the business.”
  • Snip. Down to $3.

Step 3: The Moment It Clicks

Hold up that tiny sliver of what’s left.

“This is what’s left after everything. This is the real profit. And that’s only if everything goes perfectly along the way.”

Now, shake things up.

• If labor inefficiency raises payroll costs by just 5%, the profit shrinks from $10 to $5.
• If a mistake forces rework that costs $30? The company is now losing money.
• If customers delay payments? Cash flow collapses, and payroll is at risk.

Watch your employees finally get it.

Step 4: Why This Exercise Should Be Non-Negotiable

After doing this, your employees will stop assuming money grows on trees.

They will begin to:

✅ Understand that big invoices don’t mean big profits
✅ See how waste and inefficiency kills profitability
✅ Realize that their daily actions directly impact the company’s financial health
✅ Stop complaining about budgets because they finally get why they exist

This Changes Everything—If You Make It a Habit

This isn’t a one-time gimmick. It’s how you build a team that thinks like owners.