Profit does not arrive unannounced at your small business doorstep. It's something you must consciously seek and diligently work for. There are three questions you need to ask and have answered about making bottom line money in your business.
Where Does It Come From?
It comes from performing basic business functions efficiently and effectively. Each of the eight basic business functions is a profit center. Failure to make or save money in each core business function reduces your potential. Marketing is one example. Failure to properly identify what problem your product is solving can reduce the level of revenue your sales efforts can produce.
How Do I Get It?
The level of bottom line income your business produces depends on the quality of the action steps you take. If you do not have a profit plan for each core function of your business, your level of income is out of your direct control. Take sales for example. You must have a plan for how you will communicate your features, benefits and incentives to your target market. Although you may close some random sales without a plan, you will not optimize your sales revenue forecast.
When Do I Know I Have It?
Profit is a number, not a feeling or a best guess. You must track the numbers associated with each step of your plan for each basic business function and any related plans. If your marketing function has a active plan, tracking the number of closing opportunities and the actual number of sales closed is important. You may find out your hiring requirements are not recruiting the right people. You need to adjust your hiring plan to impact your sales revenue.
Profit may be waiting around the corner from your business. If you understand profit centers, plans and tracking you have set the welcome mat out for it to enter your small business.
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