Is 2011 the Year You Will Learn How to Make a Profit?

By (John R. Aberle) | How to Make a Profit

Jan 05
In the year ahead, will you continue to hope you will make a profit because you lack the tools to manage and control your business’ profits? Or is 2011 the year you will learn how to make a profit. If you intend to wing it again, take a moment to think seriously about your situation. In an up economy, small businesses often grew despite not knowing truly how to make a profit. Abundant sales can hide a lot of mistakes. You could just get lucky and make a profit, not as much as you could have, but still a profit.

Graphic of Profit or Loss – You Choose

Is 2011 the year you will learn how to make a profit?

A flat economy makes your recovery tougher
In a flat economy, such as 2011 looks like we’ll be living through, business isn’t as forgiving as it was just a few years ago. You need to understand how to price your products and services, how to manage your cash flow – the incoming as well as the outgoing funds, and how to develop a responsible team that improves productivity – these actions are only a few of the ways you can learn about how to make a profit.
If you continue doing what you’ve been doing, you’ll, at best, get what you’ve been getting. The problem is that when things change, unless you understand how to manage your finances with business accounting, you won’t know how or what to change. You won’t survive doing what you used to do. You need to gain knowledge; and ideally you will want coaching from people who not only know how, but who also can teach you to do it.
Differences between business accounting and tax accounting
By the way, there are some major differences between business finances and tax accounting. First, business accounting aims more at planning and control rather than focusing on minimizing your taxes. Secondly, business accounting is concerned with weekly or monthly adjustments, not waiting for quarterly or year end reports, which, from my observations, you usually don’t get for at least 30 days after the period.
It may seem strange to you that as a sales and marketing coach, consultant and trainer, would talk about business accounting. Actually, it makes perfect sense because sales and marketing are only part of learning how to make a profit. For instance, if you are losing $10 on every sale, the only thing more sales do for you is help you go bankrupt that much faster. Technically, there are exceptions to this – but to make a profit, you need to know what you are doing so as to take advantage of those exceptions. I have had clients who didn’t even realize they were broke because they didn’t understand how to read their financial reports.
Back to my original question, is 2011 the year you will learn how to make a profit? It is if you decide first that it’s time to take control of your business and then that you need both the financial tools and the knowledge of how to use them.
If this makes sense to you, I encourage you to check out my friends and former co-workers at Pathfinders Profit Consultants. They have a guide, The Path to Engineered Profit.  It will give you the basic understanding of business finance and organizational structure for control and profit. I suggest you also consider taking advantage of their special on one hour of coaching with the guide because I’m sure you will have questions.
May 2011 be the year you learn how to make a profit – by control instead of luck!

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