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Why Are You in Business? It May Not Be as Obvious As You Think?

Why are you in business?  Why do want to start a business?  Most people would say “I want to make a profit.” or “Show me the money.”  I think the answer is much more complicated.

Sure, profits are an important part of business; but they are not the only driver.  Actually, profits are the natural outcome of doing other things right.

There is no question that money and profits fuel your business.  Just like fuel is to a car, profits are to your business.  But fuel is not the only component of running car.  Everything else in the car i.e. the engine, the fuel pump, the battery, the tires etc. need to working or all the fuel in the world will not help. Fuel is certainly necessary for the car to run, but it is not the purpose of the vehicle.  The purpose of the vehicle is to take you somewhere.  Where do you want your business to take you?

Years ago I taught the Stephen Covey “7 Habits of  Effective People” class and one of the habits was “Begin With the End in Mind.” Somehow it almost seems counter-intuitive to think about your exit strategy before you have hardly got started.  However, if you don’t know where you want to end up, how can you set concrete goals to get there? Do you want to leave your business for a family member? Do you want to build your business model to franchise? Do you want to sell the business in three to five years? Do you want to “work until you drop?” (that is an option albeit not the best). 

 Once you have established the end goal, you can start to build a comprehensive plan to get there.  Most of start a business because we have a passion and/or a great skill set. We know what we are good at, a question we are less apt to ask ourselves is “What am I not good at?”   Can you handle the accounting/bookkeeping for your business? Do you know the best way to organize your business from a legal perspective? Do you know all the regulations and tax responsibilities that may be applicable to your type of business?     How are people going to find you?  Is your product/service priced right?  How do you find your “ideal client” or more importantly, how do they find you?    Is social media a viable revenue stream for you? If so, how do you manage that? What happens to my business, if I get sick? What kind of insurance do I need?   Do you have the staff to support the business when it comes on?   And the list goes on.

It has been my experience in business and life that when I have focused on the outcome (in this case income or profits), it has been much harder for me to get there.  But when we focus on adding value, solving problems and truly serving our customers, the profits come almost magically.  If you want to earn money, find ways to add value.

Of course, if you have a really flawed business model, you can provide good value and still not make a profit.  Being smart about your business is crucial.

There have been other times were I have been so focused on my passion, my dream and my  cause that I didn’t pay enough attention to generating sufficient profit to maintain the engine of business.  Balance is the key to growing your business and your profits.

In these difficult financial times, it’s easy to lose focus and concentrate too much on financial performance.  As we strive to survive, we can lose sight of providing the real value that brings in the business.

As customers, we have a lot of choices.  My Smart Phone allows to me to compare prices between vendors as I shop and even gives me directions to the other store.  As a small business owner, how do I compete?  I compete by adding value.  That value can be in many different forms.  What are you doing to make the life of your customer/client easier, smoother, or just plain happier?

Sometimes we wail that “customers are not loyal.” When you are the customer what makes you “loyal.”  Would you buy from you?  No one owes you their business.  It is earned every day. You have to stay ahead of the curve.  You have to change, add, revise and improve your business model.  You have to serve.  Customers/clients vote every day—with their feet.

Provide service and value to your customer/client base—that is the true purpose of your business.

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