Starting a business is easy. Staying in business is where the work begins. It doesn’t matter the type of business or reason for starting your business, the goal should be to make money. Let me clarify what I mean by that – as a business owner, your goal should be to generate a profit. In other words, your goal should be to bring in more money than what goes out week after week, month after month.
Here’s the disconnect, many business owners want to make more money yet they don’t know how much income they generated last month. How do you know how much more money you need to make if you don’t know where you’re starting from? It’s like deciding you want to take a road trip but not knowing where you’re starting from. How will you know when you’ve arrived at your destination?
A profit goal does more than just motivate you to make money it motivates you to manage both sides of the equation, revenue as well as expense. You not only want to set a profit goal you should also track the results monthly. Knowing your numbers will actually save you time and money because you’ll be able to see which activities and strategies are paying off and which ones are not.
You don’t want to wait until tax season to find out that you weren’t profitable. You can’t do anything about it at that point… however when you focus on the bottom line each and every month, you can change the results if you don’t like them.