Building a Profitable Business is Not a Race to the Finish Line

Great things are not built in one giant leap – it’s built through the power of incremental steps.

You can achieve your dream lifestyle through your business, and that requires making reliable profits. But dreams take time to come to fruition and call for patience, perseverance and resolve. Rushing to the end goal creates the risk of building a business on a foundation made of sand.

Besides, the creative process of the journey to whatever your finish line may be, is part of what fuels your entrepreneurial spirit. Without that, business would be pretty boring.

In our blog Why Making Profit is a Good Thing, we discussed the uncomfortable topic of ‘profit’ and why businesses need to be designed for achieving it. Let’s now consider why it doesn’t have to be, and perhaps shouldn’t be, a race.

The Realistic Formula for Profit

The Tortoise meanwhile kept going slowly but steadily, and, after a time, passed the place where the Hare was sleeping. But the Hare slept on very peacefully; and when at last he did wake up, the Tortoise was near the goal. The Hare now ran his swiftest, but he could not overtake the Tortoise in time. – The Hare & the Tortoise

We live in a time of rapid innovation. We often read stories of entrepreneurs launching their way to instant growth that they could barely keep up with. It’s tempting to get lured into the appeal of quick profit (or what appears to be quick), but is it realistic to demand this of your business? Or to hold that expectation for yourself? If you’re relying on campaigns going viral – only to get caught in a hamster wheel of going from one launch to the next, burned out from exhaustion or disappointment – it’s time to reconsider your approach.

Most often, the formula for building a profitable business comes down to focusing on one or two things (your products and services) and making it great, with the consistent quality your loyal customers can rely on. This is not something that happens overnight.

By properly building your ‘signature’ product or service with steady, incremental steps, supported by consistent and reliable processes, the quality will stand the test of time and changing trends. Your well-earned 5-star customer service ratings, or valued service or product(s) that continue to meet their needs, will stand out from the competitors as solid and reliable.

How to Build a Stable Profit

 Success is not final, failure is not fatal: It is the courage to continue that counts.” – Winston Churchill, former British Prime Minister

With the combined years of experience our BWMD team has, we understand the journey to building a profitable business, and the pitfalls along the way. Here are tips that we recommend every business owner be familiar with. In addition, we suggest reading our blog Why You Need to Work On Your Business – Not In It.

  • Work smarter, not harder. What does this mean for you? It could be prioritising tasks better, adjusting your strategic plan, restructuring your team, updating processes or upgrading equipment for better efficiency.
  • Learn the art of delegation. Working smarter requires delegating, to free you up for leading, building, and growth. Approach delegating like the success of your business depends on it. It’s that important.
  • Build replicable processes. Like a well-oiled machine, systems and processes are the structure for any business to run well. Be sure to read How to Build an Effective Management System for a deeper dive into this.
  • Seek expertise. Don’t leave your business to chance. A compliant and growing business needs the solid support of accounting and legal professionals and business advisors. Invest in continual learning and self-development to hone your entrepreneur and leadership skills.
  • Be patient. Set short and long-term goals to stay focused. Rome wasn’t built in a day, and tracking your progress with milestones and achievements will keep you inspired, faithful, and persevering.
  • Don’t sacrifice your health and relationships. Pace yourself. Hustling 24/7 is not sustainable, and burning out is not necessary to build a profitable business. Of course, delegation and prioritising play a part in avoiding burnout, and if you’re in need of upgrading some bad habits, check out our blog Ten Tips to Improve Your Habits and Business.

Need Help to the Finish Line?

The team at BW Miller Dean guides business owners to reach it, by providing reliable support and solid expertise. We help business owners like you to design your business in a way you can achieve your profit and revenue goals. Contact us today to see how we can help you.

Why Making Profit is a Good Thing

Let’s talk about profit.

Do you feel uncomfortable already?

How about ‘sales’ or ‘revenue’ – are those easier to deal with instead?

It’s interesting how words can be loaded with a negative association. Too often, the media’s unsavoury portrayal of profit makes it a dirty word, with headlines slanted toward their story angle such as “putting profit before the customer”. With the portrayal of taking something away from someone, the subtle (or not-so-subtle) messaging around ‘profit’ in a shameful or negative context has a powerful impact on our psyche.

For many reasons, the topic of profit has become stigmatised and associated with greed, or attained only at the expense of customer service, quality products, and employee wellness.

Whatever your comfort level is with it, we’re tackling the taboo topic of profit, and why it’s a good thing. Without it, none of us would be in business.

Businesses Need to be Designed for Profit

“I was mentoring some graduate students at a local university recently, and I sensed that profit seems to be a dirty word these days to many aspiring entrepreneurs. I’m certainly not a fan of customer rip-offs, but even non-profits have to be cash-flow positive, or have deep pockets, to help anyone for long. Every business needs to develop a revenue model even before a product.” – Martin Zwilling, Founder and CEO, Startup Professional

The definition of ‘profit’ is a financial gain. That’s it. Not financial gain as a result of the suffering of another. Although that can and does happen, it is only one of many ways to approach getting a profit. As with money, profit in itself is neutral, but the attaining of it and use of it has a higher and lower expression.

At its highest expression, striving for profit fuels the entrepreneurial spirit, innovation, creativity and invention, and produces excellence. It’s not only good to strive for profit; it’s the fundamental driving force for society to progress and move forward.

As a business owner, you take risks and work hard. Therefore you deserve to make money! It’s not about getting filthy rich and walking over people to get there. Rather, the positive attributes of profit should be recognised. It gives you more options for things like:

  • Growing the business so you can create more value for customers, and have a positive impact on your community.
  • Creating prosperity and opportunity by employing more people and helping them have a better life.
  • Contributing to causes you care about.

Ironically, often people who aren’t making profits are driven to unscrupulous actions to save a dime or make a buck. Being constantly stressed because of no profit results in a stressed working environment, and is harder on employees.

Profiting Unapologetically

A great merchant delivers both joy and profit. Then profit gets reinvested in more joy.” – Andy Dunn

Businesses and organisations need to profit to exist, create employment, and continue making a difference in the world.

As an entrepreneur, being in business is your opportunity to do something meaningful, provide products or services to customers that value them, and succeed on your terms. The more profit or surplus you can create, the better value you can deliver.

The team at BW Miller Dean can help you design your business for profit by putting processes in place to steer it in the right direction so you can achieve your revenue goals. Contact us today to see how we can help boost its profitability.

Do You Have a Reciprocal Relationship with Your Staff?

The best relationships in life are reciprocal – and that counts for the workplace as well. When you help your employees to achieve their dreams, they in turn help you to achieve yours.

In the last few years, businesses have been put through the wringer, and on top of that, we’ve seen a worldwide trend of employees quitting their jobs in droves. Last year, the HR software company, Employment Hero, conducted a survey in which 48% of employees in New Zealand indicated that they’re planning to change jobs in the next year. It is crucial, more than ever, to make sure you retain your best employees.

 

How Can You Support Your Employees?

There are many ways you can support your employees, but here are a few tips to get you going:

  • A comfortable workspace: Whether it’s a comfortable chair, the right tools to do the job, a clean break room, or support when they need to work from home, a comfortable workspace will make your employees feel supported and increase their productivity.
  • Acknowledgements and rewards: It’s certainly not coming as a shock – everybody loves being recognised for their hard work and achievements. People need to feel that they have a purpose, and when they’re being acknowledged for their good work, your staff will feel like they’re living up to that purpose.
  • Open and honest communication: Your employees want to know where they stand with you. They want to know what is expected of them, and whether they’re meeting those requirements. They also want to feel comfortable being able to say what they think and share their ideas.
  • Growth opportunities: Whether it is getting better at their jobs, or having the opportunity to climb the ladder, your staff wants to be able to develop and grow their skills. Without the possibility of growth, they’ll soon become disconnected and bored with their work.

And thanks to Covid…

  • Support when sick or having to self-isolate: With Omicron in the community, we’re going to see a lot more self-isolation needed in the next couple of months. For staff that can work from home while they’re isolating, helping them to set up their remote workspace and calling every so often to check in with them would go a long way in solidifying their commitment to their work.

Of course, as an employer, the financial burden on you can be quite significant if a bunch of your employees need to self-isolate, especially if they can’t work from home. To help with that, the government has introduced a leave support scheme. Additionally, they’ve introduced another financial support scheme for businesses struggling because of Omicron. Check out this article for more details.

How Strong Is Your Relationship with Your Team?

It can be a challenge to stay competitive in today’s job market. Maybe your star employees are quitting in search of greener pastures, and you don’t know what to do about it. Well, that may be a sign that your organisation is lacking one of these supporting elements. It may be a good time to give these ideas a chance, and chat to your employees to hear what other ideas they have. Together, you can build a stronger, open, and more reciprocal relationship with each other.

What Kind of Support Is Available during Omicron?

1 February 2022, the government announced another range of financial support schemes to help businesses through the Omicron outbreak. Here are the highlights of these schemes, as well as a reminder that your SBCS loan may be repayable soon, if applicable.

 

Government Support When Staff Needs to Isolate

If your employees need to isolate, either because they contracted Covid or because they’re a close contact of someone who tested positive, you’ll be able to apply for one of the support schemes to help pay for your employees’ wages. 

There are two schemes available, and for both, your employee needs to be unable to work from home.

 

1. Short-Term Absence Payment

This is a once-off payment for any employee who needs to isolate for a short period of time. The payment is $359, and can only be claimed once per employee in any 30-day period, and the money should be used to pay the employee’s wage. 

This support is available when the employee…

  • Is required to isolate while waiting for a Covid-19 test result
  • Is looking after someone who is waiting for a test result
  • Lives with someone who has been to a location of interest and must isolate while waiting for a negative test result

 

2. Leave Support Scheme

This support scheme is for staff who need to isolate for a longer period of time, and for at least 4 consecutive days. A weekly amount of $600 will be paid for full-time employees (20+ hours) and $359 for part-time employees. 

The support is available when an employee…

  • Tested positive for Covid-19, is a close contact of a positive case, has been advised to isolate due to medical reasons, or is looking after someone who needs support to self-isolate.

If your employee needs to isolate for more than 11 calendar days, you can apply for a second week’s payment, as well as further support for every seven days of self-isolation. 

Read this article for more guidance about the different requirements for businesses and who needs to self-isolate. 

 

Completing a Declaration

You will need to complete and sign a declaration should you want to apply for any of the two support schemes. You can find more details and the link to apply here: 

Short-Term Absence Payment

Leave Support Scheme 

As always, we’re here to assist you if you need help with your applications.

 

Financial Support for Businesses Struggling Because of Omicron

It was announced yesterday that the government will introduce another support payment scheme for struggling businesses. This is still fresh off the press, so we don’t have all the details yet, but here is some information: 

  • Payment would be $4,000 per business, plus $400 per full-time employee. This will be capped at 50 full-time staff, or $24,000.
  • Payments will be available fortnightly, for six weeks. In other words, there will be three payments in total available.
  • Businesses must show a 40% decrease for seven consecutive days, within the six weeks before shifting to phase two on 15 February.
  • Applications open on 28 February for the first payment.

You can find the press release here.

 

IRD Business Loan Repayment 

If you’ve taken out a loan under the COVID-19 Small Business Cashflow Scheme (SBCS) in the early days of Covid, you may need to start thinking about repayments. The loans are repayable within five years, with the first two years interest-free. If you don’t repay the loan within two years, IRD will start to charge you 3% interest. This interest will be backdated to the loan drawdown date, which means you’ll pay 3% interest on the first two years as well. 

So if you can, you may want to think about repaying the loan in full before the 2-year anniversary date. If you can’t repay the whole loan yet, you need to start making regular repayments for both the interest and principal loan. 

For more information, you can read this article. 

It was also announced yesterday that the government is going to make changes to this scheme. Although we don’t have all the details yet, this is what we could gather so far: 

  • A top-up loan to the amount of $10,000 will be available for firms that already accessed a loan previously.
  • The repayment period will be five years, with the first two years interest-free.
  • For anybody taking up an additional loan, the accrued interest for the first two years of the initial loan will be removed. Interest would only start accruing at the start of year three.

How to Think Like an Entrepreneur

Penny for your thoughts? Actually, they’re worth a lot more!

Continual innovation and big-picture thinking is the hallmark of the entrepreneurial spirit and every business owner’s success. How you think about your business has a powerful impact on how you ultimately end up doing business; for better or for worse.

Zooming out to see the bigger picture is important to help you design your business as a tool to realise your goals. It’s not your teams’ concern to steer the ship in the right direction. As the captain, the navigation is up to you!

In Ten Tips to Improve Your Habits and Business we discussed the importance of identifying and disrupting behaviour patterns that are keeping us stagnant. Now, let’s shine a light on how you think, which ultimately has a profound influence on your behaviour.

Whether you think you can or think you can’t – you’re right.” – Henry Ford

What is an Entrepreneurial Mindset?

The mindset of successful entrepreneurs is different from the mindset of employees. It’s a combination of beliefs, thought processes, and ways of viewing the world that drives innovative behaviour.

You probably became a business owner because you carry the entrepreneurial spirit within you. But too often, when we get into the details of running the business, we spend less and less time thinking like entrepreneurs, and more like employees.

Here are three ways of thinking like an entrepreneur:

1) Thinking Strategically

“Strategic thinking rarely occurs spontaneously.” – Michael Porter

Strategic thinking is different from thinking reactively. It’s about your big-picture goals and long-term vision, and fuels how you work strategically. It requires you to prioritise your actions every day and filter out mundane business activities so you can think from a higher level.

When you’re thinking strategically, you’re constantly asking questions like: 

  • What’s my vision for my business one year from now? Or five?
  • What is the dream lifestyle that I’m determined to make happen?
  • What are the steps needed to get me there?
  • Who is my ally or trusted advisor to help me? Who really understands my vision?
  • What organisational planning or restructuring is needed?

2) Thinking Systemically

Systemic describes what relates to an entire system and seeing how the intersection of parts affects the whole.

Do you see your business as an interconnected web of systems, or a mesh of separate, unrelated areas? Perceiving your business and its problems through a ‘systems’ lens enables you to solve problems more efficiently. 

For example, poor sales aren’t necessarily the fault of your salespeople’s performance and their lack of effort. It may be that, instead, the company’s sales processes are haphazard, or your Management System is disorganised. Or maybe they aren’t hitting your sales goals because you haven’t communicated their targets with them, or maybe you haven’t run the numbers to ascertain whether the sales targets are actually achievable.

3) Thinking Systematically

Bringing order to chaos is an inside-out job. With your strategic and systemic thinking hats on, the systematic approach now puts the needed changes into motion.

Systematic describes having a system, method or plan, and thinking systematically allows you to see the patterns that are required to create consistent and reliable results. It’s the level of thinking that emerges once you’ve recognised the larger systemic issues, and are ready to narrow down to building the systems needed to solve them.

It’s the next step in entrepreneurial thinking. Once you’re aware of the systemic problems in your business, like the example above of poor sales, you’re ready to create the systems to solve them. Systematic thinking builds the clearly defined processes and steps needed to increase sales, or onboard new clients, or improve customer service, or increase the efficiency of and accuracy of administrative tasks.

Think Your Way to Success – On Your Terms

“We cannot solve our problems with the same level of thinking that created them.” – Albert Einstein

Thinking like an entrepreneur drives your actions, which ultimately determines whether your business will be successful or not. By thinking differently, you get different results. By continually asking questions, such as “Why do we do it this way?” and, “How could we do it better?” you’ll get the answers.

The entrepreneurial spirit is alive and kicking here at BW Miller Dean. Get in touch if you need help with taking control of your finances and succeed in your business.