What Is a Profit-Building Machine?
Fundamentally, every business is a system: a set of processes that, working together, reliably produce an intended result. Every business has four main systems:
- Sales and marketing
- Production and delivery of the product or service
- Regulatory accounting required to file financial statements with your bank and to file reports required by the various taxing and regulatory agencies
- Accounting required to monitor and evaluate the quality of the work produced by each of the major systems and their component subsystems
All of these systems are run by you and your employees. This requires more systems to hire, train, and manage the employees needed to run your profit machine.
Your Business Must Support Your Goals,
Beliefs, and Reasons for Being in Business!
Every manufacturing process starts with raw materials. You are the raw material of your small business profit machine. Every small business owner has their own personal goals, beliefs, and reasons for starting a business.
There are many reasons for starting a new business. Here are some of the more common ones:
- To make enough money to provide for their family’s needs
- To provide a great service to customers
- To provide the owner with a certain lifestyle
- To provide a great workplace experience
- To serve God
Every business owner has a specific goal for their business. Some want a small family-owned business. Others want to build a large financial empire. Some want to be able to sell their business at some point in the future. Others want to pass it on to their children.
The truth is that there is no right reason for starting a business. There are no right or wrong goals. Assuming you are not breaking the law, there are no wrong personal beliefs.
But there is one major rule: Your business must support your goals, beliefs, and reasons for being in business! If it doesn’t, my experience is that you will find a way to sabotage your business success.
That is why it is so important that you write down in detail your business goals, your reasons for starting your business, and your core beliefs on how your business should be run before you start the work of documenting your profit machine. Your core beliefs and business goals must be reflected in your systems.
Consider how differently you would run your business if your goal was to provide service only in your city rather than nationwide. Imagine the difference in how you would sell your product, produce it, and deliver it if you were building a national brand. Think about the quality of the employees required to support a large, national company as opposed to a small, local company. All of these affect the way you will design your profit-building machine.
(Be sure to see part 3 to discover how systems are the keys to financial success and to link to a video where I discuss this at length. )