Peter Richman stated it succinctly in his book, The Insider’s Guide to Growing a Small Business when he said: “Profit is the only objective measure of your company’s performance.” If this is a fact, and it is, then your business’s Profit & Loss Statement is its scorecard – showing whether you are winning or losing the game of business.
No one starts a business intending to lose. Still, most business owner’s scorecards show just that – most are losing at the game of business. Why do half of all new businesses close within the first three years? Lack of profit. Even those who beat these odds by surviving are not achieving their business potential. Far from it – the average business “survivor” will earn 18% less than they would performing the same job for someone else. Why? Lack of profit.
If you want to win at the game of business, and win BIG, you must MAKE A PROFIT. You must embrace your business “scorecard” and develop what I call a “Profit Paradigm.” This article will explain what it means to develop this “Profit Paradigm.” It will also share some items that will prepare you for your climb up the Second Pillar of Business Success: Making a Profit.
The Profit Paradigm: Having a Profit Paradigm means that you embrace two key facts about your business:
First, you are the owner. You create the culture, define what is important, and develop the systems (steps and procedures) to ensure current customers are happy and new customers are obtained. You are also the leader who guides your business to success or failure. There is no way around it. You are responsible – the buck stops with you.
Second, the only effective way to manage your business’s performance is to measure how profitably it makes current customers happy and gathers new customers. Embrace, internalize, and live these two business-facts and you are on your way to developing Profit Paradigm. You are ready climb the Second Pillar of Business Success: Make a Profit.
Before we begin our ascent, however, please take a few moments to consider these three important facts:
Learn about the different types of “profit” and the one your business must earn.
This article has helped prepare you for the Second Pillar of Business Growth, Make a Profit by sharing the importance of developing a Profit Paradigm. Learn more about Growth Strategies and the Five Pillars of Business Success.
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