Profit is how we keep score in business.
Like it or not, if you’re not earning profit in your business, the way you’re viewed may be less than favorable. And the fact of the matter is (if I can be so bold), if you’re not making profit you don’t have a business. You likely have created a job for yourself, or worse, you have a hobby… an expensive one.
I can say with certainty that most entrepreneurs don’t want to see themselves this way. They want to build a business and make more money than they did when they had a job. Yet, the vast majority (89.19% according to the U.S. SBA and IRS) are not living the entrepreneurial dream because they aren’t making more than $100,000 a year.
There are at least seven ways that you can start to position your business for profit, which I shared on Virginia This Morning last year:
Here’s a recap:
1. Raise your rates. If you raise your rates and your expenses remain flat, you’ll experience more profit. When you raise your rates, you’ll increase your margins. You may think that by increasing your rates you’ll lose clients, but in actuality most times the amount of clients you lose is reasonable considering how much more you’ll earn per client.
2. Perform an Expense Audit. Performing an expense audit will help you to determine where you’re spending money unnecessarily, and this is a great way to increase your profitability. When you get a tool that at $10/ month it seems like it’s no big deal, but what would happen if you have 20 or 30 that you aren’t even using? Exactly. Performing an expense audit at least twice a year will rein in spending and ensure that each expenditure is for the good of the company.
3. Work from home. If you don’t have to meet face to face with clients, work from home. Or better yet, get a lower-grade office space. While Class A space is tempting and oh-so-pretty, its costs aren’t justified if you don’t bring clients into your work space. You can easily convert an empty bedroom or an area of the basement into an office when it’s just you. Also, if it works for your business model and method of delivery, allow your team members and employees to work from their own homes.
4. Evaluate every purchase BEFORE you make it. By allowing yourself to take the time to think through whether or not you actually need what you’re considering to purchase, you can make sure that it’s needed and will affect your ability to grow the business in some way.
5. Create systems to reduce mistakes made and the amount of time it takes to complete a task. Systems make success predictable and they also minimize costly mistakes. By starting an operations manual and looking for opportunities to create a systematic approach to daily tasks, you can create efficiencies, reduce mistakes and start to keep more of what you’re earning in your business.
6. Stop offering discounts. Your offering is worth the regular price. You do not have to discount in order to get the sale. Stop running your business like discounts are a way of life. Trust me, being seen as the discount retailer when what you offer is boutique, is NOT the way to build your business.
7. Create an operational budget and adhere to it. While I will be the first to admit that budgets can feel “stifling,” they are designed to make sure that you are clear, focused and doing what’s necessary to run your business. By having a financial management plan (also known as a budget) you can make sound financial decisions and investments based on what your needs are while minimizing the number of wants you actually entertain. And the more you follow your budget, the greater your profit margins can be.
Want more tips to increase your profitability? Join me at the LAST EVER Unleash Your Incredible Factor Live where for 3 full days I will be teaching marketing, sales and systems to accelerate profitability for today’s entrepreneur and business owner. Secure your seat today: http://www.UnleashYourIncredibleFactor.com
©2016 by Darnyelle A. Jervey. All Rights Reserved. Darnyelle A. Jervey, MBA, The Incredible Factor Business Optimization Coach and Mentor, is the founder of Incredible One Enterprises®, Incredible Factor University® and the Leverage Your Incredible Factor System®, a proven step-by-step program so you experience financial and spiritual abundance in your life because of your business. For more information and a FREE audio CD “7 Critical Mistakes Even Smart Entrepreneurs Must Avoid for Clients, Connection and Cash Flow!” just fill out the form below.