If you are in business then no doubt you have seen ups and downs.
Without a consistent profit your small business will cease to exist.
Profit buys you certainty, peace of mind, opportunities and is the fuel to increase the outreach of your service.
1. Pay Yourself First
Your accountant may tell you that once you take out all your expenses then what is left is the profit. The wealthy know to force profits in by paying themselves first not last. Take your profits out first and then run the business on what is left.
Money flows through society from those that value it least to those that value it most.
Have you ever had an unexpected bill that you didn’t know how to pay but somehow managed?
Make that bill yourself, take the profit out first and increase this every quarter.
All your employees, suppliers are transient. You are eternal in your business. No one else is as important in your business than you. You are taking all the responsibility and wearing all the risk. You deserve to get paid.
When you value yourself the world values you. When you invest in yourself the world invests in you.
When you pay yourself first you will attract new business and new opportunities.
Start small if you have to and then increase by 10% every quarter.
2. Automate Your Savings
When you are paying yourself first, use electronic automations to take emotions out of the equation.
Emotions destroy wealth, automations build wealth.
Take the profit out weekly or monthly into an account you can’t easily touch.
Set your automations up a year at a time with quarterly increases of at least 10%.
Every time you increase your savings by 10% be sure to increase your service by 10%.
You can do this by increasing your prices, the number of people you serve or the quality of service you will provide.
3. Manage Your Expenses
Review all your expenses quarterly. Set a date for it and make it a procedure in your business.
Most of us will be paying subscription services and all kinds of expenses. Double check that they are not redundant and you’re still get value out of all your expenses.
Whatever savings you make from reducing your expense, automatically add it to your regular forced savings. You managed to pay it that far, so you can manage to pay it to yourself on-going.
Also, if you’re leasing a premises, you’re probably aware that commercial real estate, especially 2nd and 3rd grade real estate is facing massive down turn with little hope for a quick recovery. There is an abundance of offices and commercial spaces being let for great prices or even for just the outgoings.
This puts you in a good position to negotiate with your landlord.
If you have less than 2-3 years on the lease, you could ask for a significant rent reduction now in order to sign for longer.
If your lease is coming due soon, shop around and see what kind of deals you can get.
But remember, there is only so much you can cut
You can't save your way to wealth
So keep focusing on service and cashflow as well.
4. Systemise, Automate, Delegate
Maximising the efficiency of your business will maximise your profit.
Anything you have a human doing that can be done by a machine or a system will destroy your competitive advantage.
Also anything you don’t like doing in your business limits your desire to scale. Why? Because subconsciously when you’re thinking of getting bigger, you are thinking of the increased pain of doing more of the task you don’t like.
So systemise, use automations and delegate away everything you don’t love doing to maximise profit.
5. Make Life Easy for Your Customers
Take the time to look at your business from the view of your customer. Have an impartial 3rd party run through your process and report back what was easy and what was hard. This takes out your own biases.
You may have a great product or service but if you’re hard to deal with people will go elsewhere.
People will go to a business that is easy to deal with, with an average product over one with a better product but poor systems. Think of McDonalds
I tried to pass a referral to another business. He had a great product and I was very interested to buy, however it took him 9 days to respond to my enquiry. By this time I had already found someone else.
If it takes more that 24 hours to answer an enquiry, your customers will almost certainly go elsewhere.
6. The Reverse Saboteur
The reverse saboteur is a technique I have applied in the past for great results. I learned this listening to Werner Erhard.
This is something that both business owners and employees can do in order to increase their opportunities and profits.
A saboteur is someone who sneaks behind the scene to make sure things go wrong for others.
The reverse saboteur, is sneaking behind the scenes to make sure everything goes right for others.
I had heard about this technique and decided to try it for myself about 10 years ago.
I was working in a big kitchen with 20+ chefs, and this place was so busy people were constantly running behind, there was fighting and blame between a lot of the chefs.
So I started sneaking into the kitchen every morning 4 hours before we opened. I would check all the chefs sections and see who was in most urgent need of help. Then I would spend a few hours prepping up their section without telling them.
I noticed that things started to flow more smoothly, the fighting calmed down and people thought miracles were happening.
I never told anyone what I was doing, but I attracted big opportunities out of doing this.
The secret is to keep it a secret, if you take credit for it, you will receive a thanks for payment. If you don’t take credit you will attract outside opportunities.
7. invest in Others Businesses
The last tip is that if you are a small business make sure you don’t invest a large portion of your profits into your own business.
If you are a small business, You don’t have the track record, capital, expertise and knowledge to manage a business as effectively and efficiently as a large cap business.
Do due diligence and be objective on yourself.
Look objectively and ask is my business the wisest business to invest back into? If I were a sophisticated investor would I buy into and if so with how much of my wealth would I do so?