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What Should I Do With My Profit?

February 19th, 2019 | 2 min. read

By Matt Patrick

A couple of weeks ago, I wrote about “How Your Bookkeeper Can Help Your Small Business Be More Profitable.” I firmly believe that if you’ll put the concepts we teach at Patrick Accounting into practice and continue to get better one step at a time, you will see your business becoming more and more profitable.

So, the question eventually transforms into, “what should you do when success arrives at your door and informs you that you actually have money in the bank?”

You’re probably looking at the question from one of two places: you’re either already profitable and aren’t sure what to do with the money, or you just laughed out loud because you can’t imagine how this fledgling business of yours is ever going to make a real profit! Have no fear, and breathe a sigh of relief…regardless of where you are at the moment, we can help.

Here are two concepts I want you to zero in on:

  1. Look through the windshield, not the rearview mirror.
  2. Dream in HD.

Look through the windshield…

If you’re just starting out in your small business, it’s important to be able to have a vision for where you’re going.

A big part of what we do as your accountant/bookkeeper is to help you keep track of where you’ve been financially (income, expenses, etc. for some particular period of time). That’s looking in the rearview mirror, and it’s a good habit. But it’s a terrible way to drive both your car and your business.

A vision for your business is what you get when you look out of the windshield to see where you could go. It is also the thing that can motivate you to get out of bed and keep plugging away on the days when business is especially difficult…and there are plenty of those days!

Do you have a clear picture of the vision of your business? Does it adequately describe where you want to see yourself in 3 months, a year, or 5 years from now?

Dream in HD

Retirement and Investment Coach Chris Hogan coined this phrase. He says, “know your goals in detail and how you’re going to reach them. Because when you set a vision and get a plan in your mind, it moves your heart and you are able to stay focused.”

“Dreaming in HD” basically means: Getting really specific about what you are aiming for. Don’t let yourself settle for “kinda sorta” goals. Dig deep and get detailed in describing what winning looks like for you. What success can you envision for tomorrow that will motivate you to work hard today?

Chris deals with individuals investing towards their retirement. But the same idea applies to your small business. In your case, dreaming in HD will help you answer the question “what should I do with my profit?”

For some business owners, it means being able to invest money back into the business. If that’s you, your HD answer will describe specific equipment/property/employees that will make your life easier.

For others, the answer will mean having the freedom to work less on the day-to-day operations of your business and focus more on bigger picture things like expansion, new product/service lines, and partnerships. What will those things look like?

Still others will see profits as a way to build up cash reserves. What’s an exact number that will be your ideal amount?

The Bottom Line

Without a clear vision, you and your business will run wild–aimlessly chasing all kinds of goals and never really hitting any of them. Your profits won’t have a purpose.

When you do have an HD vision, however, you and your team will be happier–emotionally motivated by something bigger. You’ll create clearly defined “instructions” to follow and a point to aim towards.

Patrick Accounting loves to help make small business more profitable so that small business owners can realize their dreams. Stop by or give us a call at 901-755-5858 (in Memphis) or 501-834-5757 (in Little Rock) and set up your 1-hour introductory meeting to find out what HD future is waiting for you!