When was the last time you ran a P&L statement on your business? Were your books up to date with expenses, accounts receivable, and accounts payable? How was it looking, are you profiting? Is your business healthy and are you able to keep reinvesting into the company? Are your employees safe or are they at risk of losing their career? Is your business worth your time and energy for the profit and income you are making?
A lot of people go through the motions in life. I have analyzed a few businesses to look at acquiring. Most of them did not have good answers to the questions above. They claim they are making money but when we start going through the books, they are riding the line of shutting the doors, and some of them did that for 20 years. Not saving any money, not reinvesting anything into the business, not saving for their own retirement, working 10+ hour days, just to say they are a business owner. Meanwhile they could take that effort and go work an 8 hour, 5 day a week job with way less stress and make more money.
Those businesses are not the worst ones though. That is usually a self-employed or a couple man operation. The businesses in rough shape are the ones who have multiple employees but still operating the same way. It is your duty as a business owner to make sure your business is healthy and profitable, so you can take care of your team. Your teams livelihood is on you, since you are the one who has brought them on this journey.
So, what can we do?
Start by updating your books and pulling your reports, P&L, balance sheet, cash flow report and see how your business is doing. Are you making profit, if so, where is that money? Do you have a savings account with 3 months emergency funded yet? Do you have a savings account for quarterly taxes? On the other side, if you are not making money, why? Do you need to increase prices? Do you need to make more sales? Do you need to cut some fat, maybe a couple employees who aren’t helping row the boat, maybe you need to minimize your shop/office, or fleet of vehicles, etc. I like to look at both things, what can I do to increase my revenue and what can I do to decrease my overhead. A lot of time there is low overhanging fruit, you can get rid of right away, to get you profiting more.
Audit your company, audit your time, are you all being productive and fighting for a healthy, excelling company? If not, why, are you not leading by example? Do you have some cancer employees in your company bringing your culture down? These things need to be addressed, so you can get your company on the right track again. There are a lot of things that can drain your profitablilty in your company, you need to find them and address them. Reason being, if you do not have profitablilty, one wrong step, and you could lose everything you have been working towards.
Once you do this audit and review your books. You need to ask yourself something. Is this worth it, are you making a good profit, is it worth your time and energy? Do you enjoy what you do and who you do it with? Do you know what you are doing or do you need to get a mentor or coach?
A lot of people think they have a successful business but all they are doing is surviving. They arent growing, they are not getting better, they are making less than they could if they went and got a job with less hours and less stress. You will need to drop your ego, evaluate yourself and your company and honestly ask yourself if this is the life you want and if its worth it.
Don’t just spin in circles forever, thinking your building something you will be able to retire on. Evaluate today, are you actually profitable? Then address from there.
Your life Tutor
-Shaun Tutor
Tutors of Life 