207 - How to Start Optimizing Your Profit
On today's episode of the Unf*ck Your Biz podcast I explain how you can start making more profit in your business, beyond increasing your revenue.
This episode of the Unf*ck Your Biz with Braden podcast is sponsored by my program, The Profit Rx. The end of the year is the time to get your books in order and set up your LLC or S Corp for the new year. I work through these steps in the Profit Rx and to give you a sneak peek into the plan, I dive into cash flow management and profit optimization.
As we wrap up another year, for many business owners our goal is to scale our profits year over year. There is more to profit than just money which is what I call finding your profit sweet spot. In my Profit Rx program I share a profit matrix which is a venn diagram with three circles - hours worked, revenue, and profit. Where these three overlap is what I call your profit sweet spot. For example, you may be willing to work less hours or make less revenue if it means having more time to spend with your children or for travelling. These trade offs are all factors into your profit sweet spot.
There are three main ways to scale our profits.
Decrease our expenses - What can you cut out that is not helping you make profit? Before you go cutting, ask yourself, is this expense playing a role in my profit matrix? For example, that $1,000 expense could be saving you 10 hours a week in automation. Is the $1,000 or 10 hours saved worth more to you?
Increase our revenue - Is there an offer you've considered adding and haven't yet? A VIP Day or a limited time offer? Are you using your work hours to offer what will be most profitable for you?
Change our revenue mix - This means cutting the things making us the least money and doing more of what's bringing in more bang for buck. Again, sometimes what you love doing is not necessarily what's bringing in the most money. These are all factors to weigh in your profit sweet spot.