The thing with doing business is that everyone around you almost always thinks that you’ve got it good. You’re earning heartily, and you have hours on end to spare. Most people attribute “doing business” to being well-off or financially stable. However, that is not always the case – isn’t it? In this article, we will be discussing your profit.
Many small business owners struggle to keep up with the ever-changing climate in the commerce industry. New fads come and go every day; new competitors enter the ring. In the end, you can never really rest easy when you’re doing business. Then again, our business is also our source of pride, so we’re not exactly going to tell others we are having a hard time generating profits, would we?
Observing Your Profit
Instead, we feel pressured. We feel embarrassed by the fact that we are not earning as much as we expect to be earning from our business. We try to push ourselves to work more, expend more effort, invest more hours, and explore more options to try and meet others’ expectations of us.
Let me tell you something: Instead of “feeling embarrassed,” why not take the necessary steps to build your business’s profitability. Not just to avoid feelings of embarrassment whenever you are asked about your profits during events, but also to help you upscale your business for the better.
Here are four easy steps so that you can start generating more profits for your business and feel more confident about how much you earn:
1. Identify Your Vision
Most businesses fail during the first few years of operation because there is a mismatch between how the owners see themselves in the future and how their business is supposed to operate. This makes it difficult for them to upscale their business because it’s not entirely aligned with their individual goals in the first place. Therefore, before anything else, it is important that you identify your vision – where you see yourself and how your business can fit into that future you envision.
2. Examine Money Leaks
No matter how much you fill a bucket, if there’s a hole in the bottom, the water will still eventually empty out. The same rings true for money leaks in your business. No matter how much profit you earn, if it ends up getting spent on things that do not necessarily contribute to the profitability of your business, you’ll still end up losing money. Get to hear more about this in the latest Episode of Annette Fergs TV over at my YouTube channel.
In order to get out of this vicious cycle, you have to sift through your business expenses. Is everything you pay for necessary? Does it help grow your profits? Or, are you paying for them just because they are “nice to have.” Of course, there is nothing wrong with having nice-to-have items in your business, but you also have to assess whether your business can afford such miscellaneous expenses at this time.
3. Assess Revenue Streams
Aside from money leaks, Step 3 tells us that it is also important to assess revenue streams. Take a look at all the revenue streams your business has individually. Are you profiting off each and every one of them? Frequently, we overlook the minute details because we are too focused, looking at numbers as a whole.
Some of your revenue streams may be losing money or breaking it even; you just haven’t the slightest idea about it. Revenue streams that are break-even do not contribute anything to your business – not to profits, tax, or anything else. It only contributes to overhead costs which is why it is much, much better to close these revenue streams (permanently or temporarily) if you don’t have a viable plan to upgrade them in terms of profitability. Best focus on revenue streams that you know for a fact are bringing money into your business.
4. Is Your Team Making Your Business Profitable?
Last but certainly not least is your team’s profitability. Are the people working with you bringing in positive results, or are they just eating away your profits? There are many ways that you can measure your team’s profitability based on their performance. It is crucial for the people you work with to become your company’s assets instead of liabilities. They should help bring in positive results that would further your business’s goals and endeavours.
The same goes for marketing. You can’t just keep on spending without monitoring the returns of your investments. Monitoring expenses on top of devising a highly implementable and realistic profit plan for your business is the killer combo to better profitability. Have you got questions about creating your own profit plan? Book a free consultation with Annette & Co. today.
In conclusion, your business may already be profitable. However, certain factors may be hindering it from realizing its full potential in terms of profitability. You can have 5, 6 7-figure revenues coming in per month, but the real measure of a successful business lies in the profits. It lies in the money you get to take home and enjoy with your family.
When your business profits well, you know for sure that you are doing something worth your while. It instils more pride and confidence in you. Follow these four easy steps, and you can readily answer any profit-related question with your head held high. Better yet, get in touch with the Annette & Co. team so that we can talk more about how you can improve your business’s profitability. We offer free consultations so be sure you don’t miss out!
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