Do you love profit? We do. And not in a shallow, superficial kind of way.
We love profit because of what it means and what it can accomplish for business owners.
1. Profit is a reliable indicator of your business’ health.
We all have different reasons for starting businesses. I started Patrick Accounting because I love helping other business owners succeed by taking care of their bookkeeping and accounting. My parents owned their own small business, so I grew up watching them attempt to manage both the business and the numbers. I love taking care of the numbers side of a business for clients so they can focus on running the company. However, no matter why you started your business, if you don’t generate a healthy profit, you won’t remain in business. After all, credit cards and lines of credit only sustain you for a season.
2. Profit gives you resources to invest in your team and your business.
Profit doesn’t always directly correlate to cash flow, however, if you don’t have positive profit, your cash is inevitably going to run out. On the flip side, if you are running a profitable business, the likelihood is that your cash flow will be on the positive side. Additionally, when you have cash available, you can invest in your team (training, resources, hire that new salesperson)
3. Profit helps you gauge whether or not you should continue offering a specific product or service.
You just landed a new $100,000 client. Congratulations!! You just lost $5,000. Wait! What? All too often we find business owners focused solely on the top line (revenue). While your revenue line is essential, it’s meaningless apart from your profit number. It’s easy to think that you need to cut your sale price to win that new client, however, if you slice it too much you may be creating a bigger problem. Look at your profit at a product and service level so you can gauge what’s profitable and what’s not. From there you can make the needed adjustments.
4. Growing profit can ease your stress.
I’m putting the psychology hat on for a minute. What is it that keeps you up at night? Is it worrying about making payroll or another check bouncing, or if you’ll get paid this month? Having a predictable and robust profit can do a lot to decrease your stress. When there’s money in the bank, your confidence goes up. Strong profit can also give you the resources to do some of the things you want to do – take a great vacation; save for your child’s tuition; upgrade your car; the list goes on. After all – you should enjoy your business, not just run it.
As part of our commitment to help business owners grow profit, we are sharing the two following free resources:
- A free guide to help you start increasing your profit in the next 30 days.
- The core chapters of Profit First, a fantastic book on how to make your business consistently and predictably profitable.