The online world is flooded with entrepreneurs claiming their success with six and even seven figure businesses. For the large part, this isn’t entirely accurate. That six / seven figure claim is quite often the revenue they are bringing into their business, the sales they are making, not their profit. It’s still bloody amazing, props where props are due but it’s important as business owners we recognise when people are talking about their profit Vs business revenue. They are two very different things.
Quite simply, ” Profit describes the financial benefit realised when the revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question”.
In order for you, the business owner to live the life you have always dreamed of, and do all the things that you want to do, it’s imperative that you have a sustainable biz that’s making you PROFIT!
I’ll say it again, creating profit is the ONLY way to create a sustainable business!
Profit will allow you to gain stability in your biz. To cover you through downtimes in the market/economy or say during a global pandemic 🙋🏼♀️. Hello, 2020 / 20201.
Profit will also allow you the power to give back, something I feel deeply passionate about. Whether that be allowing you to physically free up some cash that you can give to a cause close to your heart or by making a profit, it could give you some flexibility with your time to allow you to help a cause, a small business, or someone in need.
How can you improve your profitability?
- Know your sector. No two sectors are the same so it’s important that you spend some time researching industry profit guidelines for your sector and work out how they apply to your business.
- Review expenses. This one is soooooo important. Just like you might do for your personal finance, sit down and look through your bank statements. Look at all your expenses. Can you reduce them or are there any that can be cut altogether? Never underestimate the power of increasing an expense too. Perhaps by investing in something, let’s say a piece of software. Could this software increase your productivity, therefore, increasing your profitability? One to think about.
- Focus on income-generating tasks. What is it exactly that brings £££ into your business? Focus on and prioritise these tasks.
In summary, when it comes to profit. Remember these 3 things.
- Turnover for vanity, profit for sanity.
- Take time to analyse your business as it currently stands. Could you cut some expenses, increase sales, improve productivity?
- Be realistic. We’re big goal getters around here but if your business is not making the profit you want, it’s time to look at why? Are you being unrealistic in the targets you’ve set? If so, pull them in a bit, start making the profit you want, and grow from there.
I’m one of the few Profit First professionals here in the UK so I’ll be soon sharing with you some thoughts around the Profit First method and how it can transform your business but in the meantime, you can sign up here for your FREE Profit First cheatsheet.
Until next time, stay safe, love, and high vibes!
Jo ❤️ xx