Sustainable income can be defined as the level of income that is most likely achievable by the business not just today but also future years. It excludes all temporary hikes in income due to non-repeatable events. A better way to evaluate your business is how much of your income is sustainable. Sustainable income is different from the actual income on the profit and loss statement. It is the income minus all the noise. Separating your sustainable income from non-sustainable income allows you to plan better by seeing the fruits of your repeatable processes. Ultimately, the repeatable processes are what really builds value
in your business.

Creating repeatable processes makes your business less dependent on you which means you can scale your business more quickly. This means you can enjoy more life outside your business and make your business more attractive to a potential buyer.

While this all sounds good, business owners sometimes find themselves so entrenched in their business that creating sustainable income takes back seat. Sometimes all you need is a little tweak to turn non sustainable income to sustainable income. This takes careful thought and planning. Doing the same thing you have always done expecting a different result is the definition of insanity.

In summary, take the effort to separate your sustainable income from non-sustainable income in your financial statements. Keeping track of sustainable income is crucial. If you lack sustainable income, it is time to rethink your business!