What is your business's first priority? Though it may sound a bit selfish, profitability needs to be first. When you think about what motivated you to start your business, money is usually one of the first things that come to mind.
As noted several times in the above video, profits are ultimately the determining factor in the success of your business. So, what can you do make sure that you are making a steady profit?
Here are a few tips that you should always implement:
- Be the best business in your field
- Know who your customers are and work to keep them
- Charge the right price for your products or services (Not too little and not too much)
While those are fairly common tips, there are a few other things that business owners should also keep in mind that they sometimes forget about. First of all, business owners need to really grasp the importance of profitability to their business.
So often business owners get so busy with the everyday operations that they don't have time to strategize on new moneymaking ideas or projects. They need to learn to delegate tasks, so they can make profitability their primary focus.
Secondly, business owners need to make their salary a priority. Many times business owners neglect to take a salary until the business has taken off. By doing this from the beginning, owners will always find other "more important" ways to utilize profits aside from themselves. On the other hand, if they do take a salary, it will not only show leadership, but it also provides an extra incentive to make money.
Thirdly, business owners need to construct and enforce a strict budget. If they are aware of the money that is coming in and going out, they will better be able to see if any costs can be cut.
Lastly, make sure all the employees are focused on a moneymaking strategy. The more people that are on board, the greater the chances are for the business to be profitable.
When it comes down to it, profitability is not a selfish or greedy move at all, but just a vital part of making sure a business succeeds.
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Comments
What Is Business All About?
Abby, Abby, Abby. Oh dear. I do hope your perspective changes as you mature. I speak as a specialist in making money on the web, and I say that definitely money is NOT the main reason for having or building a business. If all you want is money, go to work for someone else. People do make more working for someone else.
But if you want the opportunity to operate a business with class, with character, with integrity, then open your own business. Find your passion and follow it.
Sure, there are times you won't charge enough. And there are times you won't pay yourself. And times you will wonder if it is all worth while.
But in the end you KNOW it is all worthwhile. Your smile gets broader. There are more sunny days (even in winter!). And life is just better. Not richer, just better.
Then, almost miraculously, because you have created a strong business with heart you wake up one day and discover that you are a huge success, both financially and personally. It is a marvelous journey. I hope you go on it one day.
Re: What Is Business All About?
What's so bad about profits?
Thank GOD! Someone is finally bringing up the importance of PROFITS (not a bad word at all) to running, growing & expanding a business (something that Big Government doesn't grasp).
Abby is right on the money! Do we want to promote & sell great valued products and services or do we want to commoditize everything out there - including ourselves? That will be the end result.
It is a sad thing to see good quality products with high value being devalued just because some sap desires to grab a market. In times like these, if the consumer is not going to buy, they're not going to buy. Period. And selling at cost (which actually means you loose money) is just plain STUPID. The real sad thing is that these people never go away.
Having a good level of savings
More should be put back into a business then taken out in the form of business'. When it comes to bonus/pay rises etc it should only be done for the best interest?
Making Money
Yes, making money was somewhere there when we opened Jjanusz Custom Jewelry Design which is a fine custom jewelry studio that brings real jewelry to the public- we are not a store. The initial concept grew out of a real frustration at Janusz designing jewelry for high end jewelry stores and not being recognized or compensated properly for his designs. These jewelry stores basically paid him pennies on the (thousands) of dollars that they were charging the customers- never acknowledging where the designs came from! Janusz Goralski is a recognized artist in his native Poland- his work is on permanent exhibit in several museums- even a piece in the Vatican. So, I told him that he could bring his work directly to the public without charging all kinds of mark-up and get his name recognized at the same time. We don't make the kind of profit that we should for the quality of the jewelry that we design and create- but Janusz is his own boss and loves his work. And, some of those jewelry stores? Because of the economic times, we have seen 4 close in the last year and a half......money isn't everything- sometimes you work because you love what you are doing.
Non-profits often ask me
Non-profits often ask me whether they should start a profit-making business. My answer is: proceed with caution, and do so only if the business is closely related to your mission.
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