Andy will be speaking on the subject of ‘Profit’ at three ‘Love Business’ breakfast workshops to be held in Leicester, Nottingham and Derby on the mornings of 23rd, 24th and 25th June 2015 respectively, and he has written a series of blogs to set the scene for the workshops. If you’re in business entry is free. Each one will be packed with dozens of ideas around the theme of doing great business in the new age of the millennial buyer. Click here for more details and a registration form.
In your business and mine, profit is a state of mind and a way of being. It derives from how you see the world, which in turn reflects in the actions you take and the results you achieve.
It sounds obvious to say that making more profit is the first objective of business, but in my experience that most often isn’t true, especially in smaller businesses. Ultimately you are driven by your values, which are the keys to your world. Understanding your own values is essential if you are to leverage your effectiveness.
For example, if you are in business, will you act to put more money in your bank before you focus on producing a great product? Before excellent design? Before building a first class reputation and the respect of your customers?
Is profit more important to you than working with a great team? Enjoying turning up for work each day? More important than doing work that fulfils you and gives your life purpose?
Or do you believe that doing these things will lead to profit? If so, how will you know?
Do you actually believe that making high profits is a ‘good thing?’ Or do you carry a secret belief around with you that suggests that companies that are highly profitable are somehow unethical, devious or self-serving? If you do, you’re not alone.
Who knows, you may be right.
If you’re running a registered charity.
Assuming that you’re not, perhaps it’s time to get your thinking straight about profit.
Here’s my view;
The level of profitability in a business reflects the value that the business delivers to its customers multiplied by the efficiency with which it delivers it.
That efficiency extends into all areas of business activity, encompassing production, finance, sales and marketing, people, etc. It’s what makes for the day to day challenge of running a successful enterprise. It has to be at the heart of everything you do, or eventually your business will fail or, much more likely, it will be completely without teeth in the fight to deliver your best work to the widest audience.
Which is where your profit will come from.
Ken Blanchard expresses this superbly in his excellent book ‘Big Bucks.’ In it, he describes the three cardinal rules of business.
Firstly, your business must be about something much more important than just making money.
Secondly, making money has to be the most important thing.
The resolution of this apparent dichotomy is what makes good businesses great. My advice is to get very clear about what your business brings to the world in words that are meaningful and inspiring to both you and your customers before you try to figure out how to deliver it profitably.
And the third of Blanchard’s cardinal rules? That’s for another blog.