Do You Need a Profit Plan?

Here is my first bit of advice. Business doesn’t need to be hard. Business doesn’t need to be a constant hustle. There is one well known online business guru that is constantly promoting the hustle, hustle, hustle. He freaks me out with his “you have to work hard every single minute of every single day to be successful” rhetoric. Just watching him gives me heart palpitations (and not in a Chris Hemsworth semi-nude on a surfboard kind of way). It’s getting old. I don’t want to do business like that and I assume you don’t either? I have a life to live and a poochie who has high expectations of our work to play ratio.

Your business doesn’t need to be hard. You just have to know what you want. That is where the Profit Plan comes in.

So what is a Profit Plan?

A Profit Plan is a breakdown of how you intended to generate PROFIT from your business. Most women don’t start a business to make money, they start a business to gain more time, enjoy flexibility, stay at home with little ones, be in charge of their own future or grow a hobby into a business. I didn’t start my business to make money (although I knew that had to be high on the priority list or I would starve). I could not tolerate one more day of being micro-managed. It was killing my soul and I knew it would eventually kill my confidence. It’s absolutely fine to not having the big ol’ dollar bills as your motivation. What isn’t fine is to be completely in the dark about what your business needs to look like to make a profit.

But I really just want to help others

You can help others all you want but if you want to help lots of others you will need to market your business. If you want to market your business you’re going to need a plan to generate sales so you can feed some of that lovely profit back into getting your life changing business in front of as many people as possible. #businessfact101

#livetogive

Urghh… I posted a pic on social media saying “You’re not a charity, don’t behave like one”. The #livetogive brigade trolled the sugar right out of me. I was not sweet after reading the frustrating responses.

Want to be charitable in your business?

1) make sure you’re financially secure enough (insurance, retirement fund, emergency bank account) so you don’t need to someone else to hand you charity if something goes wrong (which trust me…. it happens!) It is crazy to me not to look after yourself first. This is a perfect case of applying your own oxygen mask before you help others.

2) know what you can afford to give (hello Profit Plan!) so you can feel comfortable handing the money over and not leaving yourself short every week. Having a fixed percentage of profit that you designate for charity is a great way to give.

3) work on a plan to increase your charitable donations by … drum roll please….. including it in your Profit Plan. You can even build this into your pricing and let your potential customers know where you like to donate the % of funds that come from each sale.

Ok, so we have dealt with the money/charity guilts… let’s move on

So few women start with the question “how much money do I want to make?” and then craft a business around that.

What I did straight up when I left my full-time job was to map out a profit plan so I knew how much money I needed to make to cover business expenses, taxes and to end up with (X) amount in my bank account. I had to take some wild guesses about expenses but I was pretty dang close. I had a starting point and each month as my business grew I updated my budget until I could predict with 100% accuracy how many sales I needed to cover expenses and taxes and achieve my weekly wage amount.

You can do this too!

You don’t have to be good at numbers to get started. I hear that excuse a lot from women in business. It is a really simple calculation and your bank statement will tell you pretty much everything you need to know.

Estimating tax seems like such a mystery to so many women too, yet every country I have ever lived in has provided a tax estimate calculator on Government websites. This is not hard stuff and if you can get at least a basic understanding I promise you will feel more in control of your business.

Having an estimate that is 80% accurate is better than being 100% clueless

A Profit Plan can predict when and how much you can pay yourself, what your business expenses are, if you have enough hours in the day to reach your sales goal, how much you need to put aside for taxes and when you can invest in that new computer, warehouse, staff member etc.. It can provide not just financial reassurance but marketing insights. When you know you need to make (X) amount in sales you can figure out how many products you need to sell or how many clients you need to book to reach that goal.

Can’t I leave it all to my accountant to figure out?

You can but you would be a braver woman than me. I am no doubt going to p*** off some accountants here but honestly, a fair percentage are extremely unhelpful when it comes to this stuff. If you’re an accountant reading this and you’re blood is boiling you’re most likely one of the amazing ones that know profit planning is vital to business success.

The average accountant is experienced and educated in tax legislation and how to apply it to your business. They’re not necessarily experts in business growth and income planning. They’re very rarely experts in marketing funnels, sales conversion techniques and customer engagement tactics. For some reason most business owners expect accountants to know so much more about business than is reasonable.

Do you want to put your future in someone else’s hands anyway?

Even if you have an awesome accountant (yes, there are many out there) you probably only see them once per year to run through your income tax forms. Unless you have the spare funds to visit them more often (like every quarter) you need to have a good handle on how to plan for profit. It is a weird catch-22, you need to see your accountant to help you understand your profit planning but you have no profit so can’t afford to see your accountant. Bummer dude.

That is why taking the time to figure business money stuff out is so important. One day you will be able to invest in a kick-ass accountant who will help guide you, but until then don’t you want to understand what all the numbers mean so you can navigate your way to that point as quickly as possible? Once you’re ready for that big step you can find an accountant to partner with you to achieve your dreams instead of handing your business over and hoping for the best.

But I make no money now, what is the point?

The point is you’re planning for where you want to be, not what you have today. If you know how many cupcakes you need to sell, or how many clients you need to book to reach your income goals you can set aside your money stress and focus just on the marketing part of your business.

If you’re not making anything right now then this information because even more crucial. How long do you really want to keep going without seeing a payday? Let’s get you there faster!

If you can’t confidently answer yes to the questions above let’s do something productive about it. You’re not just in business to improve the lives or help others. You’re in business (I hope) to also provide financial stability and safety for yourself, your kids, your family and maybe even your friends and your community.

You’re also completely entitled to want a bigger home, a better car, overseas holidays and so much more. This stuff doesn’t just happen by chance. You won’t automatically be rewarded for your generosity or hard work by the universe. As much as I wish that were true, it just isn’t a safe, long-term or sustainable plan to make money. The best manifesters I know are very aware of their business finances and they don’t rely on the universe alone to deliver.