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How Do I Make A Profit?

Written by: Adam Sonnhalter

Article Overview: As silly as this might sound, many business owners seem to forget the fact that they are in business to make a profit (i.e. make money). Most owners, in fact, don’t have a plan for how they are going to make a profit this year, this quarter, this month. It doesn’t have to be that way.

How Do I Make A Profit?

As silly as this might sound, many business owners seem to forget the fact that they are in business to make a profit (i.e. make money). Most owners, in fact, don't have a plan for how they are going to make a profit this year, this quarter, this month. It doesn't have to be that way. One of the first things we do with our business coaching clients is to get them thinking about and pulling together a Profit Plan for the next 12 months. The Profit Plan is just what it sounds like: a plan for making a profit.

Once your Profit Plan is pulled together, the real fun starts. The execution and implementation of that Profit Plan! It's critical to get other folks in your organization involved so they can help with the execution of this plan.

One of the most important areas for you to focus on is that top line (i.e. the projected sales). What is being done by you and those in your organization to bring customers into your business?

Here are a couple of ideas for how to keep yourself and your organization focused on driving sales into your business:

1. Have a Clear (and Written) Goal For The Number of New Customers: now that you have your Profit Plan in place that shows how many sales in terms of dollars you'd like your organization to have, this dollar figure needs to be broken down into the number of customers required to achieve that figure. For instance, let's suppose you are targeting $100,000 in new business this year. Will that come from one customer, 1,000 customers or something in between?

2. Break Marketing Activities Into Monthly & Weekly Buckets: marketing is what drives sales. In the end, all you can truly manage is your and your people's activity. You cannot control who and when someone will actually buy your products and services. So once you have the goal for the number of new customers identified, the question to consider is, "what marketing activities will put us in front of those prospective customers so we can achieve our new sales goal?" Marketing activities basically break down into three categories: i) Short-Term (e.g. referrals, cold calls, direct mail), ii) Long-Term (e.g. networking, writing, strategic alliances), and iii) Passive (e.g. print advertising, web sites, promotional products). Once you've picked the strategies that work best for your business, you should put a schedule in place broken into weekly buckets that drive those activities. If you'd like the list of marketing activities or a sample of the schedule to track those activities, send me an email at adams@maximumvp.com and I'd be happy to forward you a copy.

3. Meet Regurlarly To Track Progress: with so much time and effort going into pulling together the Profit Plan, we're amazed at how many people will then put the plan on the "shelf" and not refer back to it to measure their progress against the plan. Initially we would recommend that you and your marketing/sales team meet on a weekly basis to track the execution of your marketing plan. Is everyone doing what they agreed to do? Are things working as planned or do some adjustments need to be made? While it might be tempting to delay or skip some of these weekly meetings as things "get busy," we strongly advise our clients to continue with those routines to get themselves and their organization into a better rhythm.

4. Adjust The Plan Sooner vs. Later: just because you signed off on your Profit Plan in December doesn't mean you shouldn't look at it again until next December. As I'm sure you can appreciate, plans almost never go according to "the plan" (whether in business or your personal life). The key benefit of putting together a Profit Plan in the first place is to ensure that all the right discussions are happening within your organization and that all your key folks know what needs to be done. Once you and your team get into a rhythm, you'll find yourself constantly tweaking the execution of your plan throughout the year. For instance, your initial Profit Plan may have called for sending out post cards once a month to generate new leads, but instead of getting a 1% response rate, you actually have received a 10% response rate. Why wouldn't you want to increase the number of mailings sooner vs. later?

The above outlines the framework for how to drive one of the most important components of your Profit Plan, the top line. Having a plan that is constantly being tweaked and challenged during the execution phase is a key driver to making a profit in your business.

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Article Tags: meetings, money, plan, profit



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Re: Quote of the Day - "The only people witho - Thanks for sharing this Evan, there are some very powerful quotes in there, I particularly like this one:- You are now at a crossroads. This is your opportunity to make the most important decision you will ever make. Forget your past. Who are you now? Who have you decided you really are now? Don't think about who you have been. Who are you now? Who have you decided to become? Make this decision consciously. Make it carefully. Make it powerfully. regards, Mal.
Which kind of industries are you interested in? - Ecological or E-business or Investment or Finance or Management or Non-Profit or Retailer or others.
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A ton of Great Women - You might want to profile Teresa Cascioli of LakePort Brewery. She has an amazing story! I met her at at the celebratory luncheon for the Profit/Chatelaine Top 100 Women Business Owners. The Top 100 list is also a great resource for inspirational stories of Women Entrepreneurs.


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