“You can’t have a healthy society unless you have healthy companies that are making a profit, that are employing people and that are growing.” – Michael Porter

Are you in business to make a social impact, serve your community, or to create the lifestyle of your dreams? Whatever your motivation, achieving your goal is unlikely without some measure of profit. Although profitably alone is not necessarily ‘success’, business success without a profit is difficult to attain.

Profitability needs to be a key objective of every business owner, rather than an embarrassing admission as an indicator of greed. Even social entrepreneurs need profits to supplement fickle donations if they are to sustain a lasting social impact.

Being a profitable business is not about exploiting ways to rip-off customers and squeeze employees. Nor does it need to come at the expense of a work-life balance. Let’s skip the ‘profit is a bad word’ ideology, as we discussed in our blog Why Making Profit is a Good Thing. Now, let’s further the discussion of how to do it.

Solid Steps to Profit

“You know what’s a savvy business move? Making a profit.” – Cenk Uygur

The foundational pillars for a profitable business have endured the test of time no matter the changing marketplace. It’s worth revisiting the basics, so you can evaluate how your business operations are aligned with them.

Step 1: Solve a problem. Fill a need and become the go-to solution for your customer’s problem – they’ll have no hesitancy paying for it. A solution that is grounded in reality, clearly understood and with a tangible result is an easier sell compared to an abstract “nice to have”. Save the ideological products, such as helping a social issue, for special campaigns or as bonus add-ons. Instead, ensure your ‘recession-proof’ solution matches their vital need that they’ll pay you for.

Step 2: Solve it well. In our previous blog Building a Profitable Business is Not a Race to the Finish Line we described a realistic formula for profit which included focusing on one or two ‘signature’ products and making it great. Customers who receive specific solutions with a top-notch buying experience will reward you with loyalty and 5-star reviews. Providing your focused solution(s) with consistent quality that endures changing trends will set you apart from competitors. Speaking of the competition….

Step 3: Stand out from competitors. How do you differentiate your product or service in the marketplace? What makes your offering unique? Whether it’s your years of experience, convenient access, an inspirational brand, use of eco-friendly materials, meeting an under-served niche, or supporting a social cause, be the business that customers regard as having something special to remember you by that’s uniquely you.

Step 4: Be customer-focused. If there’s anything worth getting radical about, it’s being radically customer-service oriented. Beyond the quality of a product and an exceptional buying experience, make them feel genuinely appreciated. Be it referral discounts, bonuses or rewards, an informative newsletter, membership club or a special following-up, go beyond the ordinary by making customer service an art that you’re continually improving upon. This alone can be your unique quality discussed above, if you’re stuck on how to differentiate from the competition.

Step 5: Build a winning team. As we like to say, the right bums in the right seats make all the difference in building a profitable business. A thriving team culture is productive, inspired and invested in the success of the business, as summarised perfectly in this quote; “You don’t build a business, you build people, then people build the business.” – Zig Ziglar. With the right team comes the need for systems in place to support them to perform at their best, as outlined in this blog, How to Build an Effective Management System.

Step 6: Target and track. Create short-term and longer-range financial forecasts to set a target to work towards. Without a growth strategy and financial objectives to commit to, you won’t know if you’re on track and making progress toward profitability. This is where the expertise of a business advisor will be invaluable.

The Next Step for a Profitable Business…

…is to take action today! If you’ve settled for thinking a sustainable profit is an elusive ‘nice to have’, let’s change that. We’re ready to help you bulletproof your ideas, revise your business model and get you on the right track to achieve your goals. Let’s get started.