There is a recipe for everything. You may not have thought about it that way but, for example: How can you bake a cake without a recipe? How can you get from the airport to your hotel without a roadmap (which is the similar to a recipe)? How can you buy a house and secure a mortgage unless specific steps are taken? How can a doctor prescribe a medication unless the formula is right for you? These are just a few everyday examples of how everything includes a recipe to achieve, whatever it is, just right. As a CEO, president or business owner, the question is the same with your business: How can you operate a profitable business without a plan – in other words, a recipe? This article explores the recipe for a profitable business.
Everything you do each business day, consciously or unconsciously, there is an order to; a recipe. You are in business to make a profit. Without a profitable business, there wouldn’t be any business. Regardless of what the motivation was to start your company or what the product/service is, the bottom line is you are in business to earn a profit.
To have a profitable business, year in/year out, requires structure. The bigger the company, the more structure is necessary. The structure you create for the company as the CEO, president or business owner is your recipe for a profitable business. You, and everyone in the company, need to know what to do each day. Yet there is no one way to do things and may differ between companies; but structure is essential to get where you want to go.
Three Key Recipe Ingredients For A Profitable Business
Here are three key ingredients to include in the recipe for a profitable business:
1.) Knowledge and Understanding: First ingredients in the profitable business recipe are knowledge and understanding within the structure you create for your company. If you don’t have knowledge of your business, how can you succeed? You don’t need to be the best in every aspect of your business. That’s why you hire the best people. But if you don’t have knowledge, how do you know if any employee is doing a good job? There are employees who are much better at selling you than they are at taking care of their responsibilities. Knowledge is not enough. You need to have the understanding of how it all works together. That’s why it’s a recipe. In a recipe, if you leave out one ingredient you will not get the results you are looking for. If you have the knowledge but don’t have the understanding of how a business works or how to deal with people, again the results will not be what you expected.
2.) Have the right work. It’s not just to have work or to have a sale or to get a contract. You must have the right work. Work you and your company excel at. Having the right sale or signing the right contract is critical to your success. Sell products and services where you are an expert; not something you are mediocre at. Sell what brings repeat business and referrals. Don’t just sell something that fills up your day with work that isn’t going to benefit the company or the customer.
As the leader of the company, you really need to understand:
- Who is the ideal prospect or potential customer.
- What is being sold to the prospect or customer.
- How the product or service is being marketed, presented and sold.
Ask yourself:
- What is most profitable to sell?
- What may not be the most profitable to sell but is an entry level product or service that introduces the customer to the company and leads to more profitable work in the future?
The right work is incredibly important to having a profitable business. If you’re providing for the right type of work to customers then no matter how much work you may do it will not bring in the profit due to the low margins, even at a high volume of work. Your company cannot sustain itself with the wrong type of work or customer.
Yes, there are some companies such as Walmart who created a business based on lower customer prices and, at some level, leaner profit margins. Most companies are not and cannot be like Walmart. That’s why the company has a unique brand in the marketplace.
Every company must have the right work along with the right product or service to succeed and be a profitable business.
When you do get the right work, the company needs to be prepared for it.
Ask yourself:
- How do we deliver on time the work contracted for?
For example:
- If you’re a machine shop, do you have the right equipment and skilled employees?
- If you’re a software company, has the product been thoroughly tested to work out any kinks in the system before it is delivered to the client?
- If you’re an online company, are you able to maintain products in stock? Do you keep your promise about delivery and performance of the product?
Getting the work out and delivered on time involves many different factors but any aspect can impact the process, your reputation in the marketplace and its cost.
If you don’t have the right tools in place to complete the work in an efficient way, then you can’t:
- Make a profit
- Bring more work in.
3.) Have the right employees. Having the right employees requires having the right attitude. No matter what level of job someone has at your company, every individual needs to have the will to excel at what they do daily. People need to enjoy what they do. The right employees should have so much more than just a specific skill set. Each co-worker is part of a team that creates the recipe for a profitable business and success at your company. For that reason, every person that works for you is a profit center. They contribute to the overall culture of the company and how the company is represented to your customers. The right mix of people is how to get every job done – and done right.
As a CEO, president or business owner you need to think about what your company’s strategic recipe is for success and profit. Just as important is understanding how to make the recipe for a profitable business doable. Something that can be put into action and get results within a particular time frame.
Ask yourself:
- What’s not working in the business that can potentially cause everything to fall apart?
- What’s not working in the business that is creating confusion and stress?
- What’s not working in the business that is creating disharmony?
- What’s not working in the business that causes a loss of business profit?
CEOs And Business Owners Need To Take Time Daily To Think About Plans, Success, Profit
If you have ever worked with a recipe to make a special meal or a special cake and it didn’t turn out the way you wanted it to, the same can happen with your business plan. The recipe isn’t right. You are not getting the results you expect.
That’s why I always advise CEOs, presidents and business owners to take time every day specifically to think about the positive and the negative happening in the business. Doing a little business visionary dreaming too.
If you’re thinking about the negative aspects of your business that’s a positive approach. It’s how you begin to solve the issues, challenges and problems. It opens the possibility for more success and more work coming into the company. That leads to a perfect mix in the recipe for a profitable business.
The recipe for business profit is a key ingredient in the game of business you play every day.
Ask yourself:
- Do I want to win the game?
If you want to win in the game of business:
- Be a strategist.
- Be a visionary.
- Think your business through daily.
- Surround yourself with the best equipment and people.
- Most of all, be a businessperson.
Remember: Leaders Lead.
That’s the recipe for a profitable business.
To your success!
Business expert and strategist, Howard Lewinter, guides – focuses – advises CEOs, presidents and business owners throughout the United States across a wide range of industries, to MORE success – MORE profit – less stress. Business people trust Howard’s vast business knowledge, practical advice, intuitive insight and objective perspective to solve business problems and issues. Get MORE from your business! Talk business with Howard: 888-738-1855.
Connect with Howard on LinkedIn
Follow Howard on Twitter
Like Howard on Facebook
Other articles by Howard Lewinter about a profitable business include:
3 Ways To Increase Your Business Profits
12 Questions To Improve Your Business Business Profits
Just click on the links to read or call Howard directly at 888-738-1855 to talk strategy about business profits at your company.
The post The Recipe For A Profitable Business appeared first on Talk Business with Howard.
