Whether you consider yourself a small business owner or an entrepreneur, one of your goals should be to keep your profits in the black (which means you’re making money!). That may seem too basic but I want to make sure that all business owners – new and seasoned understand what it means to be in the black.
If your business is going to be the vehicle for creating the lifestyle you desire, you must focus on your profits not just revenue. Why? Because profits are the dollars you get to keep after all your business expenses have been paid.
I’d really like to believe that the statistics are wrong or skewed in some way, because the data shows that too many small business owners and entrepreneurs aren’t generating enough revenue to make a profit. I can’t imagine that any business owner started their business with that goal in mind – to lose money and keep their profits in the red. That causes nothing but sleepless nights, frustration and stress.
But the following three steps can help you keep your profits in the black.
Step 1 – Focus on revenue producing activities daily
Revenue producing activities are those actions that lead to new income coming into your business. For example, making sales calls or contacting potential clients that you’ve spoken to recently that haven’t become a paying client.
Step 2 – Create a financial management/review process
Set up a process that you can follow monthly to review your financial results. This process may include adjusting your prices, payment terms, service (or product) offerings and other key financial data points.
Step 3 – Ask for help
The most successful business owners didn’t build their businesses alone. And, you don’t have to either. Identify your strengths, operate in your zone of genius and hire others to fill the roles that you are not the strongest in.