Increasing Profits to Future-Proof Your Business
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Increasing profits to future-proof your business is a very relevant topic right now. Let’s face it. The past few months have been rough on everyone, but the changes in our daily lives and economy have been a painful wake-up call for many business owners and entrepreneurs.
Uncertainty about what the future might hold caused clients and consumers to pull back and hunker down in terms of spending and stay-at-home orders reduced traffic to many businesses. With those changes in consumer/client behavior, many small business owners and entrepreneurs were devastated with little or no money coming in and no money set aside for the rainy days ahead.
Financial worry struck at the heart of many business owners – almost overnight. Now those who have a chance of surviving the recent setback are thinking about what they need to do differently to prevent financial disaster in the future.
The reality is that if you focus on increasing profits, you’ll find your business in a more stable position when economic uncertainty comes along. You’ll be better prepared to weather any storm because increasing profits isn’t just about profit, it’s about a financial strategy that sets your business up for success – in good times and bad.
Why Increasing Profits Is So Important
According to the Small Business Association (SBA), only 40% of small businesses are profitable, 95% fail within the first five years, and cash flow issues are the reason 82% of failing businesses fail.
Profitability and cash flow go hand in hand and are critical to the success of your business. Both reflect the health of your business.
That means we, as business owners, have to make sure profits and cash flow are top priority and have a system for managing the money coming in. It may be a shift in mindset for you to prioritize cash flow and profit, but it is clearly worth doing.
The Path to Increasing Profits and Future-Proofing Your Business
Most of us would say money isn’t everything in life, but we can all agree that money is necessary to living our lives. It’s also necessary for businesses and business owners to thrive. For small business owners and entrepreneurs, their business is their source of income. Problems with business finances can sink their entrepreneurial dreams – and personal lifestyle – FAST.
So, money is important. But another interesting statistic from the SBA is the fact that 60% of business owners admit they are not confident in their financial and accounting skills. Considering how much money matters to the survival of your business (and you personally), it’s clear that more support is needed in managing the financial side of a business. You don’t have to be an accountant to be a business owner, but you do have to get comfortable with the finances and be intentional about the choices you make.
When it comes to managing money, many small business owners fall into the trap of using bank-balance accounting as their form of money management. Bank-balance accounting leads to cycles of feast or famine. When the account is flush, they spend, spend, spend. When the account balance is low, they panic and “tighten the belt.”
That’s the surest path to cash flow issues and being unprepared when “rainy days” come. It leaves business owners scrambling to pull money together for taxes or “unexpected” expenses and often unable to even pay themselves. It also almost guarantees that no attention is being paid to increasing profits. All of this is a recipe for financial chaos and stress.
Unfortunately, it’s the system most are most familiar with, so it continues to be the one many use.
There is a better system – one that ensures regular owner’s pay, profit, money set aside for taxes, and reserves for rainy days ahead. It’s called The Miracle Money Method and it will empower you to change your financial future.
With The Miracle Money Method, you can create the financial stability that will help you grow your business in good times AND create financial security for you and your family during times of economic stress. It’s a simple system to learn and implement.
Even if you have an accountant managing the books, you still need to know what’s going on in your business financially and be the one to make important decisions. You need to understand the terminology and have a strategy for managing the valuable resource of money coming in.
So, give your business finances your full commitment and attention. Take control, put a better system in place, and shift your focus to increasing profits and cash flow. When you do, your business will be stronger and future-proofed against any storm.
Learning to manage the money coming in every month will change your life and business forever – in the best possible way! It all starts with clarifying where you currently stand financially, and being clear on your goals for the future.
That’s why I created the Money Management Financial Planner. It’s designed
to give you that valuable insight and clarity you need to succeed.
It’s free, so get your copy and get started today!