DIG Insurance & Business Magazine Fall 2020 - Page 18

Sales do not translate into profit because we , as humans , spend what we make . If you are smirking that you already know this because you read and implemented Profit First , then you know what I ’ m talking about . You need an efficient system in place to bring profitability around .
To determine whether or not profit is one of the problems you should be focused on , I ’ m going to give you another sneak peek at the five Core Needs — this time , at the Profit level within The Business Hierarchy of Needs :
NEED 1 – DEBT ERADICATION Do you consistently remove debt , or do you accumulate it ?
Once you ve fixed the right problem ,
you start reviewing The Business Hierarchy of Needs again from the bottom up
. Using The BHN will ensure you
are creating a solid foundation for
your business . You simply have to focus on the fundamentals .
I hope that some of this has helped you get some clarity on exactly what profit is and the role it should have in your business . I am sending you well wishes not only for excellent
physical health , but
entrepreneurial health as well
. Keep going , my friends .
The world needs you to succeed ! +
NEED 2 – MARGIN HEALTH Do you have healthy profit margins within your offerings , and do you seek ways to improve upon them ?
NEED 3 – TRANSACTION FREQUENCY Do your clients buy from you instead of the other guy ?
NEED 4 – PROFITABLE LEVERAGE When debt is used , is it used to generate predictable and increased profitability ?
NEED 5 – CASH RESERVES Does your business have enough cash reserves to cover all expenses for three months or longer ?
Mike Michalowicz is the entrepreneur behind three multimillion dollar companies and is the author of Profit First , Clockwork , The Pumpkin Plan , and his newest book , Fix This Next . Mike is a former small business columnist for The Wall Street Journal and regularly travels the globe as an entrepreneurial advocate .
MikeMichalowicz . com ProfitFirstBook . com