But, if your highest goal in your business isn’t Profit, then you’ll likely miss the mark.

Profits are Good

Profit is what distinguishes a Business from a Hobby. So, if you want to have a business, then you need to be making a Profit. Otherwise, you’re not really serious, and your very expensive business will end up being a Very, Very espensive Hobby.

Every transaction doesn’t necessarily need to be profitable, but your pricing and expense-controls need to be well-enough defined that profit is assured overall. So, at the end of the day, week, month, year, you need to be able to show a profit, or how you are at least reducing expenses to stem red-ink.

I build profit into my daily and weekly goals. I know how much of what products I need to move in which channels in order to be profitable at the end of the week.

Do you?

What About Customer Satisfaction?

Naturally, you need to find and retain customers in order for your business to grow and succeed. So, if you always put this instant’s profit ahead of the long-term profit, then you’ll end up failing or at least having a business that is difficult to sustain.

Customer Satisfaction is the engine that drives repeat business, word-of-mouth advertising, and in the long-haul, leniency when you inevitably screw up and let your customer down.

So, you’d better be offering and delivering products and services, that customers want, in ways that exceed their expectations in quality, value, and excellence.

The Bottom Line is the Bottom Line

It is important to know how every part of your business day impacts the bottom line. You need to know how much your merchandise and supplies cost, how much your labor costs rum, and what your variable and fixed expenses are.

You also need to understand how the pieces of your transactions affect that bottom line.

I worked for a time as the Operations Manager of a 50-person company. We sold $20k and up fax systems. (Yes, they really did cost that much, and there really was demand for them…) We paid the sales guys a commission on each sale, which is typical.

It seems that every day, one of them would come up with some sort of discount or free add-in for their sale that they just HAD to close. If they discounted the sale by $1,000, their commission would go down $150. I could never quite get them to understand the it also cost the company $850 in lost profits.

Think about this formula. P=S-C-E. Profit = Sales – Cost of Goods – Expenses. If all remains the same except the sales price, a reduction in the price reduces profit by the exact amount. Discounting a sale costs the bottom line.

By the same measure, not controlling costs will affect the bottom line in the same way. Ben Franklin said it best. “A penny saved is a penny earned.” Plug that penny into the Profit formula, and you’ll see – It’s True! Whodathunk???

Does this mean that you should never give a discount? Absolutely not!Discounts, Special Sales, Quantity Discounts, and the like are proven methods of generating more business.

What it Does mean, however, is that you need to account for these sorts of reductions in sales dollars in advance and in your plan, not on some impulse to generate a bump in sales. Your business needs to be able to absorb such discounts and still deliver a profit.

Conclusion

The Main Thing is to Keep the Main Thing the Main Thing… Don’t get distracted by the crush of business or the excitement of a new product line or the allure of a new set of techy-thingies. Keep your eye on Profits. Measure them. Understand them. Make them…

How have you lost track of your profits? How have you recovered from distraction? Tell me what you need to know about being profitable.

John L

Why Not?

Because I regularly confuse Activity with Productivity.

Productivity

Productivity is the execution of events or processes that accomplish progress towards goals. Productivity is getting the RIGHT stuff done. Productivity adds Value to your life.

When I am productive, I end the day feeling good about what got done. When I am productive, I can see the pile of un-done, important work shrink in size. When I am productive, my bank account gets refreshed.

Productivity is the science of Getting Stuff Done. But it is getting the Right Stuff done that is important.

Activity

Why do I see just random action, or even focused action without connection to any goals, as effective, or even desirable at all? I can sit all day long, checking email, surfing around a bit, shuffling papers, day-dreaming (I mean brainstorming) and KNOW that I should be doing something else – and yet, not do it.

What’s with that?

What am I trying to avoid? Do I see that real productivity is somehow going to interfere with my freedom? My freedom to choose what to do? My freedom to be a lazy slug? My freedom to spiral into mediocrity?

Solution

I’m certainly the one in charge of my day. What better way to use it than to move down the road a little farther?!? After all, if the goal is worthy, the journey is fulfilling.

The solution is to train my mind to reject activity to pass the time. The solution is to train my mind to use age-old, proven tools to keep myself on track. The solution is to grow up and get on with life.

Start with the End in mind. Make a Written Plan for how to reach that End. Break that Plan into Daily chunks. Put that Daily Chunk before me so I can focus on it. Take the first step, this day, on today’s most important activity – being productive.;

My Goal?

What is my goal? At this stage in my life, I only want to run strong after the Lord. I’ve raised my family, I’ve had my career, I’ve made my fortune. Now, I have the time-freedom and the financial means to accomplish things I passed over in the years behind me.

I can now hear the voice of the Lord calling me to help other people get their lives in order by getting out of debt. I have the knowledge. I have the skills. I have the Attitude.

I now need to develop the tools.

Conclusion

If you spend your days in foggy confusion, being busy all day, but in the end, doing nothing, then you need to fix it.

What do you really want out of life? What is the most important thing you can be doing, this minute, to make a difference in your life and the lives of others? What should you be doing, Right Now, to get farther down the road to your goal?

Mark it down. Keep it posted. Get Stuff Done.

JohnL

Turns out I’m OK, but that doesn’t end the concern.

I naturally thought about how my personal health affects the health of my business. Then, about business health in general. How do you measure and improve it?

Attributes of a Healthy Business

What is it about a business that marks it as healthy? What characteristics make it ready for the long haul? What are the indicators to watch for to remain healthy?

1. Profits – At the end of any given day, a business has to be making a profit, or it won’t survive. Look at GM and Chrysler, lately. They have sustained massive losses over the years. They can’t make it up in volume. They finally had to bow to the truth and file Chapter 11 Bankruptcy. I don’t foresee those losses ever being earned back, let alone being paid back to the out-of-luck lenders.

Make sure you have a suitable bookkeeping system in place, and stay up-to-date on the entries. Be sure to pull an Income Statement every month, or every quarter at the latest. This statement allows you to look back on how your operations fared in the marketplace.

Profits? Good news. Are they enough? That’s the next indicator.

2. Plan – Do you have a Business Plan, and are you keeping up with it? Do you regularly review the Plan’s action steps? Do you update the Plan with new information? Are you keeping pace with the projections? If not, why not?

Do you have a Weekly and Daily Plan to work from? Do you know what you are going to be doing, today, to improve your business?

3. People – Are your employees helping your business, or are they hindering it? Do you have a hiring plan in place, or do you hire randomly? Do you have a defined and routine employee evaluation process? When you find an employee who is below par, do you coach them to improvement? Do you replace them if it doesn’t work out? Or do you collect dead wood – holding on to dud employees for a later fire sale when you go out of business?

4. Customers – Is your customer base growing? Are you serving more and more customers with better and better service? Do you have a Referral program or Loyalty program in place? Does your sales process capture customer information so you can follow up with them with later contacts?

What Else Measures Health?

This basic list of attributes will help you start measuring your business health. There are many more you can use depending on your business.

What are some of the ways YOU measure business health?

JohnL

“Do Something EVERY Day Towards Accomplishing Your Goal!”

And I’m pretty good at doing Something. It just might not be towards a higher priority.

Why Priorities Are Important

The trouble with not having clear Priorities, is that without them, you lose a very important filter with which to evaluate competing tasks or events. You use filters or biases all day long when you subconsciously choose what to do, to think, to say, to ignore, or to avoid. These filters are your past actions and experience, and current “known” priorities. By “known” I mean that they are currently occupying space in your conscious thought.

If your Priority is to stay healthy, then this filter helps you put down the donut, and pick up the carrot. But, if you haven’t pre-programmed your conscious thoughts to be aware of your eating habits, then the donut is gone, and you are left with regrets, not results.

You Want Results, not Regrets.

After all, results are the tangible indication that your efforts have been effective.

Being Effective means that you have been working on the right things. Right things are the tasks and actions that move you towards your goal, that provide momentum and progress. You feel better about your day when you see that Progress.

When I end my day, I want to look back and see my footprints on the path of progress. I don’t want to see a wandering mishmash of confusion or random happenings. I want to feel satisfied that I didn’t waste my day wasting my time. I want to feel that satisfaction of “Yes! I Did IT!”

Results each day bring you closer to your goals. Priorities keep you focused on those Right Things to do.

Your Highest Priorities In Business

There are only Three.

1. Cash
2. Content (Your Product or Service)
3. Customers

If you need something to help you focus on what to do, these are your filters. Use them every day.

The Importance of Cash

If you don’t have any Cash, then your ONLY Priority is to get some.

“Cash is King!” That motto summarizes this Priority. If you don’t have any Cash, you will be out of business in a very short time. You need cash to do most anything in business.

I spent $89 – in cash – to get my business LLC paperwork prepared and filed. I spend $7.00 every month – in cash – to have this website hosted. (Is that a good expense?) My car (which I bought with cash) takes gasoline to run, which takes cash to buy. Cash is ALWAYS required to keep business going.

“What about credit and lines of credit?” What about them? They provide a source of cash you can use, temporarily, to keep business going, but it takes Cash to pay it all off. Ultimately, you have to generate more cash than you borrowed so you can stay in business.

The Federal Bailouts are providing an infusion of cash into various segments of the national economy. But the bailouts are funded by debt, not cash. Someone, somehow, some-when will have to end up forking over cash-money to pay these bailouts off.

So, if your business has no cash, your highest priority is to get some.

Credit or a loan is an acceptable short-term solution, as long as your long-term plan has all this paid off – using excess cash from your business revenues.

Saving or conserving cash from your existing cashflow is an even more acceptable method. Just because you have it doesn’t mean you need to spend it. The Dotcom bust of the early century wasn’t a failure because of lack of cash. No. Most every dotcom venture was awash in it from eager investors. But, management, being unused to actually running a business and handling large sums of cash, ‘burned” it all up by spending on Cool Stuff. They didn’t have the next 2 Priorities fixed in their operations.

Cash is King. If you don’t have any, get some – NOW – and then keep as much of it as you can.

You Gotta Sell Something

If you have Cash, then you can focus on your Second Priority, Content or Product. If you don’t have a Product, then your ONLY priority is to get some. I call this Content.

Your Content (I’m using this generically to include products and services, too) is what you will sell to continue generating Cash. No Content, eventually, no Cash, and then, no Business. But, remember Priority One – Don’t pay too much for your Content.

If you are planning to sell physical products, then you need to find and cultivate relationships with manufacturers or distributors or wholesalers of the kinds of products you intend to sell. You need to select, not settle, on a line of products that complement and supplement each other. Your product line is You in the marketplace.

If you invented something and want to sell it, then your priority is to find a manufacturer that will produce your product for you. A friend of mine invented a geehaw in his spare time. He had me help him make a prototype for his patent application. He took that prototype to trade shows to see if he could sell it – no go. He decided to produce it himself. He has now interviewed and selected a jobshop that will produce and package for him at a cost he can afford. He NOW has a product. He is actually on the road, now, paying attention to the Third Priority.

If your intention is to sell eBooks on the internet, then you need to buy, or create your eBook. You need to write Every Day until it is done. If your intent is to make money selling advertising on your Blog, then write, write, write.

If you are offering your services, then clearly define what you will be doing and how much you will be charging and what you will NOT be doing or what will cost Extra.

You are in control of your content. Be sure you can verbalize it in a short sentence or motto. Be sure you can paint word pictures to describe it. Be sure you can be distinguishable from all the other Sellers in your market.

Get your Content or Products solidified and available.

Who Are You Going To Sell It To?

“The Customer is King!”

Without a Customer, your product languishes on the shelf, your loans come due, your babies go hungry, and you fail. WITH a customer, your product becomes known, your loans are all paid off, and your babies attend Harvard – you succeed.

If you have some cash, and you have your product, then pursue your Third Priority. If you don’t have any Customers, then your ONLY Priority is to get some.

If your business is local, then you need to do local stuff to find and secure your customers. Conserve Cash, and go door-to-door if necessary to get your customers. Use the phone. Post notices on bulletin boards. Signs and Posters in your store-front. CraigsList.

If your business is online, then build a great website with good Search Engine Optimization. Visit and participate in Forums where your likely customers hang out. Write articles and Blog entries to help solve people’s problems. Get your name and business out there as being the Expert in your field.

Answer every email. Follow up on every lead. Ask for referrals from every lead. Be vigorous and relentless in your pursuit of Customers.

Repeat

The reality is that every day brings these three priorities into conflict. That’s OK. Because if you know these are your Priorities, using them as a filter to examine your daily activities will always lead towards successful progress. Ignoring these filters will bring you to eventual ruin.

Focus on Cash, Customers, and Content – All day, Every Day. Success is yours.

Non-focus or wandering around leads to dead-ends, no cash, and Failure.

Be successful.

John L

“The pursuit of a worthwhile goal” almost sounds like chasing a butterfly through the woods. It is a beautiful thing. The journey takes you through some amazing natural constructions. But, your focus is on the butterfly, because to lose sight of it is to lose it altogether.

The butterfly flutters here and there, jinking its way to whatever random nectar wafts its way to its waiting receptors. So, the pursuit of a worthwhile goal may turn out to be a focused chase of a random event. This is not an acceptable condition.

Rather, we should take that same journey through the woods, but our destination is the craggy mountaintop in the distance – the one covered in glaciers and boulders as big as houses. There might not be a trail all the way up. Someone has blazed one partway, and the crowds have trampled a wide thoroughfare in some parts, but the journey is ours to plan and to conduct.

We see the goal. We draw it, paint it, project it on our walls. We view it through telescope, binoculars. We find maps for the surrounding area and pore over them until we know every stream, valley, ridge, and copse. We visit the area to find suitable launch spots and trailheads. We inquire of locals about known and secret vistas along the way.

We mark off our trail on our maps, plot out the stops along the way, calculate our caloric burn and how much food to bring. We manage our gear lists so we can carry it all. We arrange for transport, for food and water caches along the way. We arrange for time off, for care for the empty house, for emergency contact. We communicate our plans and goals to select individuals so we’ll have a support team. We save our money so we can purchase equipment and supplies.

We plot our every daily milestones after calculating our pace. The map is well-known to us, though we’ve never set foot there. We take our cameras and painting kits. We want not only to reach the top, but to inhale the flowers and pines along the way. We want to etch the vistas into our memories, to experience the thrill of walking among a herd of elk, of eating fresh-caught trout for breakfast, of touching living stone, drinking from icy glacier-melt. We don’t just want to reach the top, we want to live the journey. We also take side-trips and linger in spots more beautiful in life than in our original plans. We adjust and adapt as circumstances come to us.

That is what the pursuit of a worthwhile goal is about. Not a mindless rush to the top, ignoring all but the goal, but an aware adventure that pays far more in the journey than the goal alone can provide.

Each of us engages in setting goals and planning each and every day. We just might not recognize it, that’s all.

Can you answer the following questions?

What do you want? Where do you want to go? How will you get there? What will you need along the way? How much will it cost? Who will help you? Do you know how? What else do you lack? What do you already have? Do you care about any of this? Will you pay the price? Given two choices of action, which one should you choose? What will you do, today, to get you closer? How will you know you have arrived? Are you closer or farther away? What are the signs you are missing the mark? Should you re-set the mark, or re-double your efforts?

The answers will, of course, vary between individuals, and in relation to the magnitude of the vision that motivates us. However, in order to manage or provide stewardship to our scarce resources – time, money, energy, talent, motivation – answering them to the best of our ability will bring a clarity and energy to each day that might be missing otherwise.

Mission or Vision

We begin with a framework of belief or a vision or mission that we use as a measure, a plumb line to our everyday ideas.

However, the vision and the mission are really too broad to be of much help in the routines of day-to-day work.

Goals

So, from the vision and the mission come goals or objectives or targets or destinations. These fix the vision with a concrete picture or description. This is a picture seen through a glass, darkly. It will not be as we expect it to be. But it will help us along the way as we work day by day.

A goal is a target — a destination — an expectation — a measure of faith — a challenge of faith — a statement of desire — a statement of motivation. A goal is NOT a statement of fact or a prediction of the future, nor a rigid, mechanical, unalterable, inevitable control device. It is a guide to actions, a helper for planning, a measure of decisions and actions. Without a goal, it is difficult to make plans; it is difficult to make decisions of value.

I have used the example before of the targets in an archery range and a bunch of little boys and girls. The targets are not there for these children to hit bull’s eyes, but to keep the arrows all going “that way”.

But keep thinking about the ones who return to practice – who are captured by the thought of actually hitting the bull’s eye. In time, they will hit the target, and finally hit the bull’s eye. But because they are small, the target is close and the bow is weak. As they grow physically, soon there is no challenge in hitting bull’s eyes so close. They get a stronger bow, and move the target farther away, and keep practicing the skills that allowed them earlier success. Someone will become good enough to go to the Olympics and win a gold medal.

We aren’t out for gold medals. I believe goals are what will help us put to work what the Lord has put in our charge.

A goal is something we can see, touch, feel, and describe.

Therefore, a goal is SMART. This is an acronym for:

S pecific

M easurable

A ttainable

R elevant

T rackable

Specific

Can you see it in your mind? Can you describe it to someone else? Can you touch it, or feel it? Can you draw a picture of it? Can you see what is around it? Can you hear it? These are specifics. “Make some money” is not specific. “Make $100,000 in Net Profit by March 10th,” is specific.

Measurable

Related to specific is the ability to measure it. How many? How much? What date? What pace? The above specific example has a number of measurable attributes. What are they?

Attainable

There is a need to be realistic about a goal. We need to be able to believe in it. We need to be able to say… “It could happen.” This doesn’t mean that we put limits on what’s possible. It does, however, mean that we don’t set a target or goal so unrealistically unachievable that even the most faithful prayer and petition can’t convince us that we believe in it.

Relevant

Relevance keeps us from pursuing something that does not contribute to overall success. This means that it “fits.” Here is where we measure against our Mission and Vision.

Trackable

This simply means that the measurables are available often enough that we can stay informed about our progress. Imagine setting a goal and not being able to see how well we are doing until the end, only to find out we were “this close” to making it… Daily, Weekly, Monthly collection and comparison of progress towards goals is important.

This also allows periodic comparisons of progress against a plan, and adjustments either to the plan or to the goal.

Within the Vision and the Mission are the Goals. From the Goals flow Plans.

Planning

Planning is defined simply as deciding – today – what to do – tomorrow. A Plan is a series of pre-made decisions about how to accomplish a Goal. The Goal must exist before a Plan can be made. Once the goal is SMART, it is easy to make a Plan to reach the goal.

Begin at the end and work backwards. Divide the time into smaller and smaller chunks until you are able to see today. You will ultimately be able to answer the question “What do I need to do, today, to reach the goals I set?”

I recommend that your plan focuses on the Production or Action kind of Goals. Answer these questions:

How many customers will I need? How many do I have now? What is the demographic profile for my customer base? How will I identify prospects? How many prospects will I have to ask before I get a yes answer? How will I recruit them? How will I train them? How will I lead them? When do I get started?

I also recommend you start at the far end of your goals to get the big picture for your plans, and then re-focus on the coming Year, then the Quarter, then the Month, Week, finally the Day. Each day, in your quiet time, meditate on to do this day to accomplish your goals.

Another illustration to help give light on this topic. Imagine yourself embarking on a vacation. You just start driving one day, and then you find yourself back at home. Did you have a good time???

Start again. Imagine you want to have an exciting two week vacation this October. Where do you want to go? Who will go with you? What means of transportation will you use? ? If you are driving, what route will you take? What stops will you make along the way? If you are flying, which airline will you use? Will you fly Coach, or First-Class? What kind of living accommodations will you require? Will you make reservations, or trust that there will be openings when you arrive? What will you eat? Will you take it with you, buy along the way, or eat in restaurants? How much will all of this cost? Do you have that much available today? How much will you have to save before you leave? How much is that each day? What will you have to give up to save that much money? What about alternative plans? What happens if it rains, or doesn’t rain? What do you do if there is a detour? What if you can’t save that much money, what would your second choice be?

You get the picture. Planning is not only smart, it is required.

We begin with the Goal – the Target – the Destination. We build Plans on the Goals – decisions today about what we will do tomorrow. As we work our plan, we are always evaluating progress so we can change plans, or readjust goals.

What kinds of Goals do you need to establish? What level of Planning do you need to do?

This Blog is a startup, of sorts, for a new phase of my life. I’ve retired from active work. I have no job. It’s wonderful!

It’s time to step out of the offices and the storefronts and stretch my legs as a writer of business wisdom. Not that I have any particular store of it. But what little I have gets to go on display and will attract its share of raspberries and huzzahs. And I’ll get to do my share of new research to stay ahead of everyone else.

So, what Action for me? I’d say concrete Goals and Plans.

Some would say this should have Mission, or Purpose at the head. But this is a small endeavor, for now, and such higher ideals will only get in the way, one more time, of what really needs to be — Action.

So, an Initial Action is to write this post. My Initial Action Goal is to write another dozen. A secondary Goal is to compile a list of 100 potential topics to write about. My Action Plan is to write posts, research blog enhancements, activate various affiliate programs, and participate in selected promotion activities to increase readership.

Simple. Direct. Effective.

What Goals, Plans or Actions would you recommend?