Creating a Plan for Profit

Last year at this time, we talked about the importance of budget planning and how to create a 12-month budget to plan and project growth. If you'd like to look back and review that article, you'll find it here.

Now that you have the budget and a plan in place, and are using it to improve your business performance throughout the year, the next step is to learn how to maximize its value. What we're talking about here isn't simply breaking even…but growing a profit and adding value to your equity.

After all, what fun is it to simply break even? If you're serious about your business, the goal should always be growth in profit and equity value.

When the business generates a true profit, there are three things you can do with those profits:

•       You can pay down debt - always a good thing to do
•       You can reinvest in your company (more or better ad campaigns, new staff or technology upgrades, store improvements, etc.)
•       You can take the money out in the form of benefits or dividends to the owners, or bonuses to the management

The ultimate goal is to accomplish all three of these things - first by eliminating debt, then by reinvesting in your business. After that, you can invest in yourself and your people and enjoy the good life!