Planning For Massive Profits in 2019
Using the Profit Maximizing SMART System
2018 is over and as many of you know, I just finished meeting many of my most successful business owners in order to create a tax plan designed to help them pay the lowest possible taxes legally allowed. This year we will have saved our clients over $1 million in taxes after we do their 2018 tax returns.
During our discussions I noticed that while they all can tell me what worked and what didn’t work for them in 2018, none of them had a systematic plan to grow their business profits in 2019.
And this is not that uncommon for business owners who are running reasonably successful business owners. It often appears that the smartest thing is to continue to do what worked for you in the past.
But this can also be a trap! We now live in a fast-changing world where what worked in the past seldom works in the future.
“Don’t look back. Something might be gaining on you.” –Satchel Paige
In business I can guarantee you that someone is always gaining on you. You only have two choices in your business—you can either lead or chase! You can either be the leader in your niche or you can be chasing the leader.
The bad news is that in this fast-paced business world, the leader in any field is getting the best customers and making the highest profits in their niche. All the rest are chasing them to get the most profitable customers and highest market share.
“If you don’t know where you are going, you’ll end up someplace else.” –Yogi Berra
The most highly profitable businesses didn’t get there by accident—they had a plan and they executed it. If you want to be highly profitable in 2019, now is the time to create your profit plan!
Why most business owners don’t prepare an annual profit plan
One problem I hear from business owners is that they don’t know how to make a profit plan. A quick Google search illustrates how little business owners focus on developing a profit plan. Compare these Google results:
- Google "Sales Plan" and you receive 2.55 billion results.
- Google "Marketing Plan" and you receive 2.29 billion results.
- Google "Employee Development Plan" and you receive 1.21 billion results.
Now Google "Profit Plan" and you only get 774 million results. That’s right; you will receive over 3 times more results for creating a sales plan then for developing a profit plan.
The vast majority of business owners only concentrate on increasing sales. Don’t believe me? Just ask the next 10 business owners you run into how business was in 2018. I bet nine of them will tell you how much their sales numbers increased or decreased. You might get one who knows how much their profits increased or decreased. Trust me, these are the exceptions. This focus on increasing sales is why most business owners don’t have a profit maximizing plan.
The leading business owners understand that, while sales are important, the only thing that matters in business is your bottom line profits!
I have worked with many business owners who increased sales and still lost money. One of my early clients had revenues of $500k in year one. In year two they had sales of over $3 million and lost $250K. What happened? I argue they failed because they had a sales plan but not a plan to massively increase profits. (They went out of business a year or two later.)
Use the SMART Profit Maximizing System!
One of the biggest reasons business owners don’t create a profit plan is that they don’t know how. Increasing sales is something the average business owner understands. Thus they work to increase sales and hope that at least some small amount will end up increasing their bottom line.
I created the SMART Profit Maximizing System after studying the thousands of business owners I have worked with in the last 40+ years and seeing what the most profitable business owners do to massively increase profits. The SMART Profit Maximizing System incorporates the strategies that I discovered consistently increased business profits the quickest.
Here are two examples of using the SMART Profit Maximizing System in 2018 that are pretty typical of what can occur when you focus on maximizing profits rather than simply on increasing sales:
- A company selling medical supplies only increased their sales by only $13,165 but increased their bottom line from a loss of ($187,590) to a profit of $175,076 for a profit increase of $362,666.
- A CPA firm (yes, mine) had a 8.4% decrease in sales but had 77.2% increase in profit. This translated to an $89,534 increase in profits even though sales dropped by just under $40k.
So what is the SMART Profit Maximizing System?
Here is a basic outline of what is included in the SMART Profit Maximizing System:
- S is for increasing sales to current customers with a particular focus on your most profitable customers and products.
- M is for managing your money in a way that increases your gross profits while controlling your payroll costs and reducing your overhead. It also includes having strong accounting records that provide the business owner with key systems and reports needed to focus on maximizing their profits.
- A is for accelerating your profit growth with massive action. Slow growth is tiring and allows the competition to catch and pass you (if they haven’t already). In this section we cover the mindset, strategies, and techniques that the most profitable companies have adapted in order to achieve massive profits.
- R is for recurring revenue. Almost every highly profitable business I have worked with or studied had a plan to get their customers to return often and pay them more. Part of this plan was making sure that the recurring revenues were highly profitable.
- T is for tax planning. There are not many guarantees in business. But tax planning is guaranteed to lower your tax bill by thousands—legally! In the last three years I have helped my most profitable business owners lower their taxes by over $4.3 million dollars. This is $4.3 million dollars that went to their bottom line rather than to the government.
In future articles we will get into each of these areas in more detail.
So when and how do I start?
Right now, in January, is the best time to create your 2019 SMART Profit Maximizing plan! Doing so now will allow you to implement your customized profit strategies in order to have your most profitable year ever.
This will put you miles ahead of your competition. Less than 1% of your competitors will even have a profit plan, and even if they do, they seldom have real world tested strategies and tactics. Getting started now will give you a huge head start!
Call me if you need help creating your profit plan. Keep your eyes open for future emails where I will be launching my SMART Profit Maximizing System coaching program that will help business owners create and implement their own profit maximizing plan.