What are profit goals and why should you set them?
We all know how important it is to set goals in order to achieve success in our business but what about setting profit goals?
Many of us are so afraid of money and anything financial mainly because we do not understand it. So, we end up leaving our profit goals to the last minute with a rough estimation or better yet, no profit goal at all.
And then, we do this funny thing of hoping that we hit our goals and hope that we make a profit at the end of each month. Sometimes, we mistake our profit for the amount of money that we pay ourselves at the end of each month.
So, what is profit, you ask?
Profit is the amount of money that remains after all your expenses have been paid. In other words, it is the financial reward that you gain from investing all your time, effort, skill, blood, sweat and tears into your business.
Now that we know what a profit goal is, we need to set a profit goal for ourselves every month to help us direct our actions and put strategies in place to reach our target. For many of us just starting out, we are bombarded with sayings such as, “make 6-figure launches’ or “double your income” and that can be really tough when you are just starting out or you are having a slow month.
That's why it is highly important to have a strategic profit plan in place. To get the most out of your profit plan you need to have a balance between your income goals and not selling yourself short by setting unrealistically low goals. You need to take into consideration your worth, the worth of your business and how far along your business is.
How to set up a profit plan
There are three really basic steps to help you smash your profit goals.
Step 1 - Look at your revenues and expenses
Take a look at your business. What is coming in? What is going out and what is left over? Look into all the different streams of income that you currently have and measure how effective they are. How much time do they take? What is bringing in a higher profit? What brings you the most joy? What task can you outsource in order to upscale?
Also, take a look at what your expenses are, what are you giving out that is unnecessary and what are you paying for that is vital and needs to stay?
Step 2 - Set your goals
Once you have your expenses and revenues drawn up, it is time to figure out what you want for your business. And you can do this by setting up a profit plan with some profit and business goals.
Ensure that you have some time set aside to work on your goals and plan. Look at the bigger picture of what you want by the end of the quarter or by the end of the year, so that you have something to work towards. Once you have your big-picture goal down, it’s time to break those goals down into smaller monthly and daily goals to be able to check-in with those goals to see if you are on track.
Step 3 - Optimize
To reach your goals you are going to need to optimize your business to make sure that it is running efficiently. Ultimately, we want to upscale and meet our profit goals and to do that sometimes we are going to have to hire extra help or let go of that one affiliate program that is just not making us money. This is the step where you do the work in order to meet your goals.
Who is ready to get their profit goals in place?