Could you make more money if you were working for someone else? This is the question you can use to work out if you are heading for success in your business. Or not.
Another question: is the money great for the effort I’m putting in?
How about: why am I always busy and often stressed?
You are not alone. Many Owners ask these very questions.
What happens in many cases is that the Owner of a business starts out as a “technician”, being highly skilled in a certain field, product or service. As the business grows, the owner needs other skills that they may not have.
Over time, the business moves from being a profitable small operation to a larger one that either loses money, or only pays basic wages to the Owner, with no additional profits or dividends.
In many cases, the Owner often must dip into their home equity or borrow on credit cards hoping that tomorrow will be better.
Without a clear understanding of all the principles that make a business successful, the financial situation often doesn’t change and the business just drifts from year to year.
How is a successful business put together, I hear you ask?
We use a Business Triangle to explain:
While many businesses have a reasonable turnover, most of the money that comes in the front door gets spent out the back door. We call the difference between the income you currently make from your business compared to what you want it to be as “Profit Leakage”.
We use a diagnostic tool to identify the gap in each of the nine key drivers of your business – they are the Red ones in the bottom half of the Triangle E.g. Products, Servicing, Marketing etc.
This is where the Owner needs to start controlling all the Red areas of the Triangle. Otherwise, the business will start controlling the Owner!
At Optimal Profit, we think that identifying the Profit Leakage is a good way to find additional income. Combine that with a clear Business Growth Plan and you will be on your way to success.