I have heard it said before that, until you make a SALE you don’t have a business…but…I believe that…on top of that…until you make a PROFIT, you don’t have a business either – you have an expensive hobby.
Years ago, when I wasn’t making a profit, when I was “reinvesting” all the sales revenue in my business, when I was overspending…I was told by a successful entrepreneur that I had an accounting hobby…
I though – what a d**k – what does he know…
Of course, in hindsight (it’s a great thing, right?), he was right…I DID have an accounting hobby since I was not making a profit…
Businesses make money (ie profit).
Hobbies cost money.
It’s that simple to me.
So if you are not making a profit right now (or making a very measly one)…stop everything and assess your spending in your business.
DO NOT LET ANOTHER DAY GO BY WITHOUT YOUR BUSINESS BEING PROFITABLE
And yes, profit is a choice…and you CAN put in place steps to be profitable straight away.
The main thing you need to do is get your spending under control – because right now, if you are not profitable, your spending is not under control.
How do you do that?
Print off all your business bank account and credit card statements for the last 12 months – yes them ALL
Get out a highlighter and red pen
Go through every single transaction and ask yourself – is this expense absolutely 100% necessary to keep the lights on in my business? Could my business operate without this? Be really honest – is it 100% necessary?
When the answer is – yes it’s 100% necessary – then mark it with the highlighter.
Go through every single transaction (again) and ask yourself this second question – am I getting a positive return for this spending? Whether it’s saving or generating money? Or saving time? Is it a return greater than the expense cost?
When the answer is – yes, the return is positive – then circle with your red pen.
Now everything that you haven’t either highlighted or circled…cancel…get rid of…it is not benefiting you and your business. It’s wasted money…stop that spending today.
Most people save A LOT just by doing this exercise…do it…and let me know how you get on in the comments
I do this exercise every single quarter in my business and it has stopped my overspending…and is massively powerful in getting you on that profit road.