A quick reminder of why profit must be the primary mission of every business, and how to protect it.

1. PROFIT IS WHY
YOU ARE IN
BUSINESS
FROM “FIRE SOMEONE TODAY”
BY BOB PRITCHETT

2. PRIMARY PURPOSE
Maybe because it sounds greedy, small businesses in
particular do not generally talk about profit. Instead they
focus on their secondary purposes: to help individuals find
the best life insurance at the lowest rates; to provide a worry-
free roofing future; to bring the authentic taste of Chicago
deep-dish pizza to Podunk, Wisconsin.

3. PROFIT SUPPORTS
EVERYTHING
Profit lets you accomplish your mission
Profit supports all your other priorities
• Mission
• Customers
• Employees
• Community
• Corporate jet
Profit must be your first priority
• Or you can’t pursue any others

4. PROFIT PYRAMID

Community
Employees
Customers
Mission
Profit

5. IT IS EASY TO BE
UNPROFITABLE
Fall in love with your customers
Value quantity over quality
Create work to keep the staff busy
Take projects at a loss to keep them from competitors
• Cleverly preventing the competition from having a loss…
Fail to correctly account for costs
Lose a little on each unit and make it up in volume

6. IT IS EASY TO BE
PROFITABLE
Stare into the face of impending doom
• Imagine losing your business
• Imagine losing your house
• Imagine losing your income
Attack costs
• Cut ruthlessly
Promote sales
• Pedal harder
Use the Business Decision Making flowchart
• It is easier than you think

7. BUSINESS
DECISION MAKING
No
Is it
Don’t do it.
profitable?
Yes
Consider it.

8. STAND FIRM
FOR PROFIT
Customers rarely ask you to take their business at a loss
• No compunction about asking you to take it at break-even
Special discounts and exceptions are like holes in a dam
• Resist the temptation to buy the business by forgoing profit
No, it is not a strategic decision / relationship / customer
• ‘Strategic’ has a second definition

9. DEFINITION
stra·te·gic (strə-tē'jĭk)
adj.
1. Of or relating to strategy.
2. Wasting lots of money:
this strategic project will change
customer perceptions of our brand.

10. PUT PROFIT FIRST
Profit is the first mission of every business
Profit protects and enables all the other missions
Goals inspire, cash permits, but profit is why
A business that is not pursuing profit is not a business
• It is a hobby
• And a black hole
• …consuming your
• …time
• …effort
• …hope
• …future

11. HOW
Treat profit as an expense
• Pick a profit target and consider it as sacred as payroll
Reserve and set aside profit like any other accruing expense
• Can you take profit off the table every day?
It is risky to manage expenses against income
• Income – Expenses = Profit
• Risks expenses = income, resulting in no profit
• Income – ( Expenses + Profit ) = Gravy
• When profit is an expense, the remainder is gravy

12. MAKE PROFIT
A LINE ITEM
Research & Development
Cost of Goods
Rent
Payroll
Profit
Taxes

13. WANT MORE?
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