BUSINESS PROFIT 💸 HOW DO I BECOME MORE PROFITABLE?
Want to learn how the Tradies Success Academy can help you optimise your trade or construction business for profit, growth, and time freedom?
Today, we're diving deep into the question that's on every trade business owner's mind: "How do I become more profitable?" Now, I know this can be a tricky subject, but let's break it down together.
Understanding Profit
First and foremost, we need to start with the basics. Profit is what's left over after we've paid for everything, and I mean everything. That includes materials, cost of goods, operational expenses, staff, superannuation, and all the other costs that keep our trade businesses running smoothly.
Bank Account vs. Profit and Loss
Now, here's where it gets tricky. Your bank account isn't an accurate representation of how much profit you've made. To get the real story, you need to look at your Profit and Loss (P&L) statement. It's like the financial compass of your business. But here's the kicker: many of us, myself included in the past, don't close off our months properly. We forget to invoice for the work we've done, and we overlook our monthly operational expenses. This leads to a foggy understanding of our true profitability.
Closing Off the Month
Closing off the month means invoicing regularly within the month. When you do this, you get a crystal-clear picture of how profitable you've been. This awareness is gold because it allows you to make informed decisions about your business.
More Profound Aspects of Profit
Now, let's explore some deeper aspects of profitability that often go unnoticed. Imagine you're working flat out for two weeks, putting in those long hours on the tools, and you're invoicing for your time. Business seems great, right? But then, because you didn't quote for future work, you hit a dry spell for a week, and your income drops significantly. These workflow inconsistencies are profit killers.
The Importance of Workflow Consistency
Consistency in workflow is the key to profitability. It's not just about being busy; it's about maintaining a steady stream of work. These inconsistent work periods can drain your hard-earned profits faster than you can imagine.
Efficiency and Scheduling
When you establish consistent workflow, you also build a foundation for efficient scheduling and invoicing. Consistency leads to predictable income and a healthier bank account.
Don't Trust the Bank Account
Speaking of bank accounts, don't rely solely on them as an indicator of your business's health. They're like a holding place for all your cash, and there are many liabilities and assets to consider. That's where understanding your balance sheet and P&L comes in. They provide a holistic view of your financial situation.
How We Can Help
If all of this sounds like a lot to handle, don't worry; you're not alone. The Tradies Success Academy is here to support you. Our goal is to help you achieve operational time freedom as quickly as possible. We want you to live your best life, and that means understanding the financial intricacies of your business, creating awareness, and implementing systems for consistency.
So, if you need a hand, reach out to one of our expert coaches. We're here to guide you on this journey, so you don't have to do it alone. Let's work together to make your trade business not only profitable but also a source of personal fulfillment, one that allows you to enjoy life to the fullest. Cheers to your success, and talk to you soon!
