What "Should" Your Profit Be?

December 13, 2019
CLARK.LAW

A lot of businesses learning about Profit First ask, and sometimes don’t get a very satisfactory answer to the question “What should my profit be?” How profitable should my bakery, my marketing firm, my construction company, whatever it is, how profitable should it be? What is the percent I should be shooting for? People want some kind of magic answer so they know the number they need to reach. They want to look at other people’s businesses to get the answer.

 Watch our Law Firm Director Liz Stevens share the answer in our Profit First Fridays! video “What Should Your Profit Be?”

Video Takeaways

  • There is no cookie-cutter answer to what “should” your profit be. You won’t find a magic number, or be successful if you try to copy it from another business. The answer to “What Should Your Profit Be?” is wherever it best serves you.
  •  Before you can do anything, you need to figure out your real profit. Your real profit shows you the starting point. 
  • Once you know your starting point, you can then decide, possibly with our help, where you want to go with your profitability. In other words, how to achieve your goals. 
  • What your goals are will determine what strategies to follow to improve your profitability over time.
  • With a plan in place, we can move your profit 1-2% per quarter, which makes a big change over a short period of time, to get you to where you want to go!

Take Action. When was the last time you assessed the goals of your business? Defining your goals and then creating a plan to achieve those goals is the key to figuring out what your business’s profitability needs to be — so the business can finally start to serve you. Take 10 minutes to define one of these goals:

  • How much do you need to take out of your business each month to support the lifestyle you want to live? 
  • How fast do you want your business to grow next year?
  • At what speed do you want to implement changes in your business?

Next Week! With the right profit number in-hand, build a system to project your business’s cash flow, so you can anticipate when you’re in a crunch to hit your profitability number for the month. Next week we’ll discuss some creative tips in:

“7 Cash Flow Tips You Overlooked”

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CLARK.LAW

At CLARK.LAW, we’ve built a different type of law firm. Our attorneys and staff have impressive educational and professional experience – but, unlike traditional law firms, we embrace modern technology to create efficient workflows and processes. Today’s business leaders should have access to high-quality legal guidance without subjecting themselves to the waste and excessive overhead that plagues traditional law firms.

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