A new year offers new beginnings. Past challenges, disappointments and even failures are history, and in spite of the sting that sometimes remains, the prospect of a new beginning fosters hope. And hope is a driving force that keeps us looking forward to a brighter future.
But hope is not a strategy. Diving into a new year without a clear goal and a well-defined path to get there is to invite more of the same results, repeating history and ending up right back where we started. It happens a lot. In fact it happens way too often. It shouldn’t.
Regardless of your company’s history, the coming year can be different – in fact, very different. Different, of course, means better; which is to say, more profitable. I’ve never met a business owner who said that he or she did not want better results in the coming year, yet time after time history is repeated. Old problems and challenges get recycled and the same, or worse, results emerge. But, you have the power to rewrite history with the decisions you make right now. History is what happened five minutes ago. It is always dependent on decisions you make and the action you take right now.
Deciding that profit is not an afterthought is a good first step. Profit is not the undefinable, elusive goal that many builders assume it is. ‘Better’ can only be achieved by defining it, planning for it and ensuring that every single available resource is being deployed to deliver it.
What are your goals for the coming year? And what if “Profit first” became your mantra and driving thought, your goal for every decision you make starting now? Better yet, what if you defined “profit” as an exact number, the exact net profit amount, in dollars, that you fully expect your business to provide to you, and only then created your plan by working backward?
There is no reason why any business owner should ever expect or accept undesirable results. Beginning with the end in mind changes the way we make decisions, building a strong inner compass that trumps traditional thinking and cultural norms. It gives purpose to our thinking and does away with the frazzled, hectic lifestyle that so many have come to expect as the norm. Stephen Covey, in his powerful book “The Seven Habits of Highly Effective People, captures it this way:
How different our lives are when we really know what is deeply important to us, and, keeping that picture in mind, we manage ourselves each day to be and to do what really matters most. If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster. We may be very busy, we may be very efficient, but we will also be truly effective only when we begin with the end in mind.
Hope must be harnessed for its power to be realized. Begin with the end in mind. Set your minimum profit goal and ask a few confrontational questions to test your assumptions:
- Do I know my break even revenue goal for the year?
- Do I know my overhead expense budget in order to calculate my break even revenue?
- What exactly is my gross profit percentage goal?
- If I am committed to my net profit goal, how much can I afford to pay in salaries?
When committed to profit first, the answers to these questions become a pursuit, not a mysterious matrix of unknowns. To get started, download the Legacy GPScorecard from our Contractor Templates page and begin to draw your future financial health road map. Or better yet, invite Legacy Business Leaders to present our one or two-day Business Accelerator Program at your office to put these principles into action and give you the real-time momentum needed to rewrite your history.
Legacy Business Leaders is a business coaching and leadership training firm that works globally with builders and remodelers to re-chart their goals, learn key business disciplines and capitalize on the Legacy Process for success and long-term profitability. They can be reached at the email above or by phone at 330.470.1300.