By John Sanpietro, Certified Business Coach
Whenever I begin working with a new Coaching client, I ask them what they want out of their business. Most of them will tell me, among other things, that they want to be profitable.
I tell them that isn't a problem… IF they're truly committed to profitability.
And even though they all say they are, many come to realize they really weren't, and once they can change that, profit will soon follow!
So, what does it mean to be truly committed to profitability? It's really quite simple. There are just 2 criteria:
1. You Don't Allow Yourself To Waste Time
Wasting time is easy! There are so many things you can do that distract you from your actual business. Things you may even convince yourself are necessary, but, in reality, don't pass the profitability test.
Time is the one thing you truly have a finite amount of. And the amount of time you have to spend on your business is even more finite. EVERY MINUTE of that time spent on tasks that don't build your business is making you less profitable.
And those minutes add up!
Even if you spend just two hours per week wasting time, that adds up to almost three weeks of lost productivity and profit per year! Imagine what you could have done with those extra three weeks!!
What Can You Do?: Take a good, hard look at where you're spending your time. Ask yourself… is this REALLY helping me build my business? If the answer is no, eliminate it. Plain and simple. Like I said, becoming profitable isn't complicated. You just have to be committed.
2. You Don't Allow Yourself To Waste Money and You Stick To Your Profit Margins
This is the classic battle between stamping as a hobby and stamping as a business. If you want to truly build your business, you have to be committed to doing everything you can to make sure EVERY DOLLAR you spend yields a profit.
Not just breaking even… but a real profit! You have to base your decisions on ROI (return on investment).
For example, you may have an idea for a class, but when you crunch the numbers, you realize it doesn't make you enough profit to justify the time involved. What should you do? Can it! Or, at least, change it so you can meet your profit margins.
Plenty of ideas I've had have died in development. Not because they wouldn't have made me money. Because they wouldn't have made me enough money. They wouldn't have met my margins.
Remember, profit margins are important. A higher profit margin means you can work less and make more. This leads to better work/life balance, as well as greater opportunities for growing your business.
Another example… I'm a big believer in professional development. I like to take courses and attend conferences. However, I won't even think about purchasing a course or a ticket unless I was 90-95% certain I was going to earn TEN TIMES what I was spending in the first twelve months. So, if I spend $750 on a conference, I expect to make $7,500 in new profit as a direct result of that conference within twelve months.
If I don't think that's a real possibility, I don't do it. And I have no hesitation and no regrets because I'm committed!
What Can You Do?: Take a look at everything you're spending money on, and analyze the return on investment you're getting. Determine what you want your profit margins to be. It doesn't have to be 10X like me (although it could be), but it should be at least 3X. If you find things not meeting your margins, drop them… or figure out a way to change them so they do.
Again, this isn't rocket science. It's very straightforward stuff. Sticking to it is tough, though, because the commitment it requires is very, very high.
But if you can maintain it, you'll be amazed how profitable you can be… and how quickly it can happen!
Certified Business Coach
STAMPING IS MY BUSINESS!
THE BUSINESS STAMPERS COACHING GROUP
The Premier Online Community for BUSINESS-MINDED Stamping Business Owners!