Clients who have a massive passion for their business and want to make a difference in the world. Several feel a deep responsibility to their staff and their families, and are motivated to keep the business going to support them, others want to change their industry and need to grow into a position of authority, one wants to set up a foundation to support a cause they feel strongly about.
And some people do have some guilt or other negative associations in their mind about being seen to be motivated by money. In fact most entrepreneurs don’t have money and wealth as their main motivation. It’s usually about freedom, choice and making a difference. It can even feel selfish or mercenary to be focussing purely on making money like some kind of Gordon Gekko character.
But the thing is you need profits to generate cash. Cash gives you options, choices and freedom. (but as you’ll know if you’re regular reader, cash doesn’t always follow profit!)
Bumping along at break even, or a low level of net profit just doesn’t give you room to breathe or time to plan, and is downright demotivating. So often we see business owners who’ve completely lost sight of the dreams, plans and goals they had when they first set up in business.
But in fact, not making money is the sure fire way to make sure you don’t reach your goals and don’t get to change your small part of the world.
No profit = No cash = No freedom, and no resources to do what you wanted to do. Whether that’s retire at 50, sell out for millions, pay off the mortgage, set up a foundation, or protect the families of your employees.
So part of what we do with every client is put a profit and cash improvement plan in place. We help them create a financial vision so they can see what the next three to five years could look like. When they can see again what’s possible they start to reconnect with the dreams they used to have (you know, before the world told them to stop being so unrealistic and unreasonable)
And we show them that the “pursuit” of more profit and cash is in fact vital if they really want to make sure all that potential doesn’t get wasted. So many fantastic things are possible when we feel that we have choice and freedom.
So many businesses have gotten used to making a small net profit, “after all we are still coming out of a recession, what do you expect” (voice of that realistic person again) that getting by has become a way of life and people’s expectations get continually managed downwards. They used to do that to us at Next and it drove me barmy.
Well I say it’s time to stop and take a good look at your business. Remind yourself what your big goals and ambitions were and if you’re still on track to achieve them. And ask yourself are you really making the cash you need to give you those choices back? There are so many ways to start increasing your profits and improve your cashflow so why on earth wouldn’t you want to?