What do you do when your business is bleeding money like someone who had an arm ripped viciously from the socket?
The pain from losing money becomes so intense that it can be debilitating.
You’ve been working on faith, putting in your hours, investing in marketing and growth only to have your dreams crumble.
You find yourself in a financial hole.
Robbing Peter to pay Paul.
Knowing that if you stumble ever slightly, Peter will die, and you’ll be at the end of your rope.
I’ve been there myself.
Just over thirteen years ago, I was my employer called me into her office and informed me that my services were no longer needed.
I had mixed emotions.
On the one hand, I was embarrassed.
On the other hand, I was relieved.
I thought I was a good employee.
I’d always been successful in life.
Yet there I was with a pink slip in hand and no real prospects.
My confidence was shaken badly.
I thought I was at the bottom of the barrel.
I had no idea what I was going to do.
I just wanted to do something else.
I thought I had enough savings to weather this financial crisis.
A year later, I was still unemployed, and the economy was in the dumps of the Great Recession.
Credit card debt was mounting, and my savings were shrinking with each day that passed.
I started up an accounting business and started to get people to hire me.
It took a lot longer than I wanted it to take me, but I held steadfast knowing that little by little, I would pull myself up by my bootstraps.
As I surveyed the remains of my financial life, I put a simple three-step plan into place to get my feet underneath me.
I’ve talked with some business owners that have grandiose plans of world domination like Dr. Evil.
Well, maybe not like Dr. Evil.
I mean, who wants to be Evil?
But I would like to have my own little kingdom.
So what should I build for myself?
Too many people think that they will become overnight millionaires because they believe their ideas, products, services, widgets are spectacular.
They may become millionaires overnight.
Most likely, that night will last a couple of years.
I’m all for dreaming big and shooting for the stars.
However, we need to build a foundation underneath that dream first.
We’ll be much more successful if we take baby steps on our path to greatness.
Stage One Keep The Personal Lights On
The first stage is to keep our personal lights on.
It’s essential to keep the lights on.
We need to cover our basic necessities of food, clothing, and shelter.
Until we are comfortably fed, with a roof over our head, and a shirt on our back, we will be living in poverty.
We deserve better, and getting out of personal poverty is the first stage of financial healing.
We graduate from stage one once we are paying ourselves a fair salary consistently.
Stage Two Keep The Business Lights On
The break-even point is a momentous occasion for the business.
At the break-even point, the business is no longer bleeding money.
The business is not coming to the business owner with its hands stretched out, begging for another loan.
At the break-even point, the business pays the owner and can pay all of its bills.
The lights of the business shine brightly, and everybody is happy.
Stage Three Profitability
Stage three is where all the blood, sweat, tears, angst, anxiety, and hard work finally bear their fruit.
The profits may be small in the beginning, but don’t let that despair you.
One dollar of profit is worth significantly more than one dollar of loss.
With a dollar of profit, you have a viable business.
With a dollar of loss, you are doomed to failure until you can turn that red ink black.
The goal of every business should be profitability.
It’s much more important to be profitable than it is to be big.
Don’t fall into the trap of growth for growth’s sake.
It only makes sense to grow if you can grow profitably.
I’ve come to believe that the biggest enemy to business profitability is the business owner.
At least that has been the case throughout my business career.
At times the lack of profits has been due to my overthinking.
Other times it was due to my timidity.
Other times I was caught up in doing things that weren’t profitable activities.
I had to swallow that bitter pill of failure and accept my status.
I had to make changes and get back to basics.
I had to build my business the correct way by going through the natural stage progression to extricate myself from financial oblivion.
First, I had to keep my personal lights on.
Then I had to keep my business lights on.
Once I stabilized my business and personal financial life, I was able to grow into profitability.
It takes time to build a profitable business.
It also takes time to live our lives.
Building a profitable business is a beautiful journey and worth all the effort, time, and resources you pour into it.
Before I end this article, I wanted to ask you if you’re looking to grow your business profits and having more cash in the bank, send me an email at email@example.com with “PROFIT” in the subject line… tell me a little about your business and what you’d like to work on together, and I’ll get you all the details!