Two Systems You Need to Be Profitable

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Two Systems You Need to Be Profitable

Today, I want to challenge you with the following thought:

Are you working on your business, or are you only working in it?

Of course, working in your business is vital. It allows you to keep your doors open, get your employees paid, and fulfils your responsibilities to your many loyal customers. And for most business owners, this is a difficult job in its own right. By the end of each week, you might feel utterly depleted after running all of your business’s day-to-day operations.

Nonetheless, it’s critical that you find some time to work on your business as well.

The truth is that you’re not going to stumble into a profitable business. In order to increase profits and grow your business, you need to be intentional and implement systems that allow you to make consistent forward progress.

So, here are two systems you need to put in place if you want to build a profitable business:

1. Make a Weekly Commitment to Improve Your Business

Consistent and systematic improvement is the key to increasing your business’s profits.

Of course, this challenge is much easier said than done. As I mentioned earlier, you’re probably working hard just to keep your business afloat—particularly during a more difficult season or at a time when the economy isn’t as strong.

But it’s important that you also find extra time to commit to working on your business each week. You may only have a few hours to spare, or perhaps you have 20 hours or more that you can set aside each week.

In any case, I recommend trying to commit to a minimum of four hours each week—in addition to all of the time you spend working in your business.

What will four hours per week help you achieve, exactly?

It gives you ample time to work toward and master the profit formula. We spent some time discussing this in the last post, but just to refresh your memory, here is the formula again:

A 10% increase in qualified leads

+ a 10% increase in the conversion of these leads into paying customers

+ a 10% increase in the annual sales amount per customer

+ a 10% increase in referrals from current customers

+ a 10% increase in customer retention

= a 10% increase in sales

+ a 10% increase in gross margins

– a 10% decrease in product costs, overhead expenses, and income taxes

= a massive increase in profit!

While this might appear to be a fairly simple and straightforward formula, each one of these steps is a different objective that requires a significant time investment in order for you to accomplish it. You don’t increase your referrals or your conversion percentage simply by thinking about it. You need to take action!

The four hours you commit to chipping away at these 10% improvements will allow you to boost your company’s profits quite significantly. So, don’t wait—start today!

2. Find People Who Will Keep You Accountable for Change

Once you start committing time to working on your business each week and applying the profit formula, it’s important that you surround yourself with people who can keep you on track.

Do you have other business owners, mentors, coaches, or close family members who keep you from getting complacent? Do these people know about your profit goals and the different objectives you’re trying to achieve?

The truth is that your commitment to weekly improvement is only going to be so effective without people who can keep you accountable for change.

So, if you don’t already have a few people who are frequently checking in with you, seek them out and get them on board.

These people will play a crucial role in your business’s growth. Of course, they should be a source of encouragement, sound advice, and creative ideas. But they should also keep you focused and make sure that you’re constantly making forward progress toward your goals. What’s more, they should be able to lay down the hammer—giving you the occasional kick in the pants when needed!

As you’d imagine, however, these types of relationships don’t grow on trees. These valuable bonds require a personal investment, a sense of trust, and a mutual understanding that each person wants the best for the other!