How You Can Still Maximize Your Profits for 2016
November 30th, 2016 // 4:45 pm @ Scott Manning
We all have but one day left until we click over to another December. It will be the last month of another year, the only year 2016 you’ll ever have. This should be kind of like heading into the final stretch of a race, where the sprinters put their heads down and give it all they’ve got.
By now you should be at least into your 2 or 3 or 4 or more months of working for profit. I realize that’s not how you look at it. As if your year is one long giant bank account like those thermometer style fundraising pictures they fill up with red when you hit goals.
Let’s say your average profit margin in your business is 15, or 20, or 30, or 40, or (as is the case for most of my clients in professional practice or consultancy) 50 percent.
That means (assuming you hit your goals for the year) then the first half of the year you are working to pay for the rest of it and then the last half of the year you are working to build your wealth and grow your businesses.
Unfortunately, most business owners only accept what they get instead of plan for what they want. I call it reverse engineering and we have talked about it many times before.
Your profit margin is only relevant based on the overhead you have in order to operate at the level of performance you wish to have. For our Dentists, I explain it this way: if on your first $1,000,000 in revenue your profit margin is 30%, on your second $1,000,000 of revenue your profit margin should be substantially more because overhead should not rise equally with revenue; not in the types of businesses, professionals and doctors I work with. We are not doing capacity based manufacturing or cost per piece or retail sales. Your greatest overhead will always be your operational expenses and in your people.
The objective of every business should be to maximize the potential of these two things.
So judging your goals by profit margin is wrong. Instead, you should be basing it on how much money you want to make every year to achieve your goals and how much you desire to grow followed by a formula that tells you what is necessary in order to make that possible (while factoring in your escalating profitability with each increment and level of growth to your revenue).
Here’s the point – starting tomorrow you now have 1/12 or a little more than 8% of your entire year left. You ought to be working for all profit. That is, if you don’t have the mindset of some hobbyist entrepreneur and amateur business owner with a job where everything in your life is based on month-to-month.
Most businesses, nearly all of them, have the greatest revenue month in December. I would hope you have consistency throughout your year, yet you should focused on aggressive acceleration through the end of 2016 because you are piling on profits.
This should not be a hard concept to understand. The goal is to score as many points as possible every day, week, month, quarter and year because with each accumulating point you are accumulating profit.
The single biggest downfall to business owners’ mentality is they are expense focused instead of profit driven. They manage motions instead of managing results. They focus on getting enough money to move through the month instead of creating enough revenue to maximize the return on their investment in their business.
I challenge you this December to swing for the fences, double down, get focused and be relentless. If you truly understand the power of money, the strategy of compounding interest and embrace the reality of your control as a business owner, then you would never allow yourself to squander 8% of anything. Especially when you realize this last month is the difference between not 8% of your income but probably more like a third or a fourth or some greater percentage of what you will actually have to show for your efforts and sacrifice in the year 2016.
Over the next few weeks, I will push you hard and give you tactical things to do to maximize this important month.
Your first gift for the Holidays is right here…read it again, study it, own it, because you won’t get the truth about business, money, profits, your responsibility and most important your opportunity from anywhere else.
I’m one of you; in the trenches every day. We’re fighting the same battles. Lots of people will tell you what you want to hear in order to make you feel all warm and fuzzy. Here, you get the truth and you move from being a passive business owner into an active investor and aggressive strategist managing the asset you’ve worked so hard and sacrificed so much to create and build.
Good news, bad news: your work is never done… because you are in the business of being you, not just how you make your money but what you do with the money you make. This December let’s make more than ever before. If you do the work, you deserve the reward, it goes in that order. The choice is yours; the calendar moves on to a new year either way.
Category : Blog
