It never ceases to amaze me that this question could ever be asked. But it is: in different circles, and with different motives. But let me put the question to you: ‘is ‘profit’ a dirty word?’
Of course it’s not!
Why do we start a business in the first place? To make money!
But obviously there’s more to it than that. We go into business because we believe in the product or service we are selling. We do it, too, because we want to be sufficiently successful to fund a decent lifestyle for ourselves, and our families.
We do it because we are ambitious, and want to build something that creates employment; we want to be successful, and for many, the sky’s the limit.
Profit does not happen overnight. Some people struggle to make a profit at all, despite them being very good at what they do. And if you start a business and expect to be making a profit at the snap of your finger, you are entering a fool’s paradise. If only it was that easy!
My clients represent a broad church: from events manager to bookkeeper, from PR to property; from industry, marketing, trade, and much more. They all have great experience in their respective professions, but they are all realistic, and know that being successful comes with hard work and learning the principles of making a business work.
Essentially, profit is the lovechild of preparation and organisation.
So why do people struggle to make a profit? Because they don’t prepare, or they are not organised. Or both!
More often than not, they are too busy chasing turnover than profit – paying the bills is King to some; but too many also struggle too, with what is a sensible ‘mark-up’ charge; worrying their charges could put customers off doing business with them.
I can usually identify the symptoms with one short conversation. And that, to be truthful, is why business owners hire a coach such as me. As has been said in a previous blog, ‘every business needs a Brian’ (that’s me!). You simply cannot survive in business on talent and ambition alone.
Two types of profit.
Operating profit is the lifeblood of a business: it pays all the bills! Equally important, it should be part of the business owner’s game plan for future growth. Growth is the oxygen that breathes life into the continued development, and ultimately, the growth and future of a business – if you don’t invest in your business, you will not be around for very long.
Profit from sale is the ultimate reward for owning a business. To achieve this, a business owner must spend time working ON the business, not just IN the business.
I sometimes make the analogy between starting a business and buying a car before your first driving lesson. Buying the car does not give you the licence to start driving it: you have to learn to drive, then pass your test; and even then, deal with the pressures of driving on your own; a fresh experience in itself.
Likewise, starting a business does not mean you have the license to drive it. I am your driving instructor!
One of the greatest skills of being a leader is the ability able to seek help at the right time, and having a coach to guide through the obstacle course that is being in business will help you become organised in such a way that profit will follow. It works!
Profit most certainly is not a dirty word. It is what every business owner must aspire to. It is the reward for the proverbial ‘blood, sweat and tears’ that go with taking the decision to follow the dream.
Profit. It’s the future!