How would you like to absolutely crush your next year's profit target?
Is it doable? Absolutely!!!
And here's the strategy to make it happen….
The best strategy to crush your profit target is to actually have one. The old saying "when you fail to plan, you plan to fail" is absolutely correct.
After spending 14 years in the corporate world being responsible for a 10-figure sales target, I got into the habit of "planning" very well. The thing I notice with small business owners is that most don't plan as effectively as they should. And for this reason, they miss out on hitting their profit targets. But don't worry! If you spend one day working on each of the 11 elements below, you'll easily crush your profit targets .
Have A Sales Target
Yes, just having a target will increase your chances of success. Numerous studies have shown the positive impact of stating your goal. However, just stating it isn't enough. You have to go further, including doing a lot of reflection first. That means sitting down and analyzing your previous year's results. What went right? What didn't go so well? And what do you need to change? Only by analyzing your previous results can you determine what you can do for the next year.
Now there are two camps out there: The first camp thinks "don't worry about past performance, next year is a blank slate". I agree with that to a certain degree. Here's why I would caution this approach. I've worked with business owners who wanted to triple their growth in 12 months. I'm all for that but when I looked at their past performance, they would have to do something drastically different, like multiple acquisitions to even come close to tripling their business. So be optimistic but also realistic. The other camp is the conservative one. They don't want to get disappointed so they set reasonable goals. Now reasonable is good. You'll most likely achieve them. But how long is it going to take you to get to your ultimate profit goal? At a 10% annual growth rate, it'll take you 7 years to double your business. That's a long time!
The purpose of having a target is for two reasons: A) It gives you something to aim towards. If you don't know what you're going after, how are you going to figure out how to get there? B) Which is even more important. A sales target aligns everyone on your team, including your strategic partners. If everyone knows where you are headed, your chances of getting there are a lot higher.
I once consulted a team where we increased their annual revenue by $4 million. Simply, by bringing the executive team together to come up with a mutually agreeable target. We allowed every person in senior management to voice their opinions and brought the entire team together. They created a target that they were truly excited about for the first time. It only took 4 weeks to get them aligned and that was another $4 million in the business owner's pocket.
Daily Habits Count
Now that you have a sales target, this next step is even more important. The only way to hit your profit targets is to simply create the daily habits to fulfill them. Break your annual activities down to daily activities and execute these consistently.
Now there's a massive difference between activities and RPA's…revenue producing activities. Just because you have something to do, doesn't mean you should do it! Everything in your business should be based on two things: A) Creating a customer B) Turning that customer into a Super Fan. If you haven't checked out my blog on Super Fans, I highly recommend you do because it's where the real kick in. You can read it here: https://purdeepsangha.com/higher-profits/
Before you do something, ask yourself these two questions A) Will this create a customer B) Will it help me turn a customer into a Super Fan. If the answer is "no" to both, delegate, outsource or seriously reconsider why you're doing it in the first place.
Focus On People First
Almost every business owner focuses on the "tactics" when the time comes to planning. But the one thing that is consistently overlooked is the the people involved. Do you and your team have the skills necessary to hit your profit goals? That means you have to take a hard look in the mirror to determine whether you are fully equipped to take your business to the level you want to.
Everything in your business comes down to people. Technology, a downturn economy, competition, etc. are all factors of people. Aside from mother nature, everything else is set by human beings. A simple yet powerful exercise is performing a human inventory check. Just like you check your physical inventory, you do a similar exercise with yourself and your team. Just list everyone on your team and their skills, abilities and motivation. Once you have a comprehensive list, you'll be able to figure out what skills are missing from your team.
Here's something to keep in mind. The growth of the business is directly proportional to the growth of the business owner….that's you!!! The faster you grow your skills, the faster your business will grow.
How About The "Who"
Here's the fast-track path to your profit target. Rather than focusing on the "what" and the "how", focus on the "who". Way too often business owners get stuck in the weeds trying to figure out how to get something done. Instead try to find the person who can help you get it gone. When you find the right person, it not only saves you a lot of time and money but a lot of headaches as well. Business is all about opportunity cost. Where you put your resources matters.
Here's an example: when I first started my consulting and coaching business, I had the option of trying to figure out how to market it myself. I was a marketing pro and could have easily figured it out on my own, over time. But instead I sought out the expert in helping consulting professionals market their business. I spent an arm and a leg but it's the best investment I could've made.
Don't look at the cost, look at the outcome. Yes, you may have to a pay a lot to find the right person. But what will that save you? If you find the right person, it can accelerate your results and the cost is easily justified. Look for coaches, consultants, outsourcing companies, strategic partners, etc. who can help you get to your goals faster and easier. It's worth it!!
Make Better Decisions
Business success comes from a series of decisions and actions. Think about it. All you're doing is deciding to go down one path or another or perhaps do nothing. But every single move you make in your business is based on a decision. When you make better decisions, you get better results. So the trick is to figure out how to make better decisions.
Here's a simple checklist to follow:
1. Make decisions when you're in a "Powerhouse" state. A state when you are full of energy. Your brain consumes up to 20% of your calories so it's vital that you make decisions when you are full of energy.
2. Know the reasons why you're making the decisions. I'm not talking about the logical reasons; I'm talking about the emotional reasons. When you uncover what emotions you're truly trying to fulfill, you'll be able to make more effective decisions.
3. Align your decisions with your identity. Your brain is a powerful organ but it also has its flaws. Your brain will not make a decision outside what it believes it is. So if part of your identity is "I'm not a risk-taker", you won't make decisions that have a lot of risk. Be conscious of your identity because that's exactly what you're basing your decisions on.
4. Consider all information when making a decision. Your brain tries to conserve energy so it filters out complicated or what it believes to be irrelevant information. You may not even notice that something is relevant to your decision because your brain is just doing its best to not waste too much energy. Look at your decisions from all angles. What information are you missing? Are you overlooking anything? Is there someone else who can help you fill in the gaps?
5. Put emotions into your decisions. Studies from Stanford show that emotions are powerful factors to execution. The more emotions you put into your decisions, the more passionate and persistent you become and the better you execute.
Measure, Measure, Measure
What you measure get's results. It's pretty simple. Break your profit targets down into quarterly, monthly, weekly and even daily targets if possible. The best organizations I've coached measure their results daily. Yes, it requires work but the payoff is far greater.
Here is why most people do not want to measure their results….because they don't want to see themselves not hit their targets and fail. They'd rather tell themselves, "this wasn't the best week but I'll make up for it next week." It's true. If you're crushing your targets on a daily basis, why wouldn't you want to track them. It's your opportunity to give yourself a pat on the back.
Winners measure, losers don't!
It's All About Accountability
The #2 reason why businesses achieve or fail to achieve their profit targets is accountability. And that starts at the top. Is every person at every level in your business, including you, being held accountable for the results you're responsible for? If not, what needs to be done to make them accountable.
I can't tell you how many times, businesses I've worked with have grown just from holding employees accountable. Accountability is directly linked to profits!
Have A Spending Target
Most businesses are "gung-ho" about making sales but they aren't as enthusiastic about cutting expenses. Increased profits come from doing two things: A) Increasing revenues B) Decreasing expenses. When you do both, you're way ahead of the game.
People don't like the term "cutting expenses" so take a look at it from different angle. Have a spending target. Just like having a sales target, what can your business do to minimize spending? I spent years studying and training with some of the top Asian companies like Toyota, Nissan and Honda in Japan. I can tell you that their core strategy is to not only make more sales but also to reduce the waste in their organizations. They strive to spend less to produce more. Does it work? It works so much so that North American companies can only dream about having the efficiencies that Asian companies have.
The secret to sales is keeping the momentum going. Sales can be tough and there are times that it seems like nothing is working and that's exactly why you need to have momentum. Remember that sales is a long-term game and consistent and purposeful activities ultimately lead to results. Sales are lagging indicators of your previous business activities. There are times when I wanted to give up and then a bunch of sales came through. When I examined the sales, I noticed that they were a result of activities from months prior.
Now here's the secrete sauce. The trick is to get out of the gate with immediate momentum. When you're team starts the year off strong, you have a much higher chance of hitting your targets. This is one sport where being the underdog isn't fun!
Plan To Fail
Having a plan is all fun and dandy but you know what happens to plans, right?! They go to sh_t when they're actually executed. That's because real world things happen: the economy tanks, interest rates change, competitors start creeping up, etc.
Here's how you get smart about it. Come up with different scenarios prior to executing your plan. What will you do if ____happens? You don't have to spend weeks coming up with mock scenarios but you should spend at least one day coming up with as many scenarios as you can. Businesses don't fail because they plan on failing. They fail because they failed to plan on failing.
The #1 factor to hitting your profit target for the year is Authority Marketing. Authority Marketing is essentially positioning yourself as the "go to" solution for your market. Consumers are bombarded by thousands of marketing messages daily. If you're not seen as the Authority in your market, you're not being seen at all.
When I first started consulting and coaching business owners, I was shocked that their #1 challenge was that they didn't have enough profitable clients. Yes, you may have clientele but are they profitable or are you just settling to get by? The most effective way to acquire a consistent stream of your perfect clients is to use Authority Marketing. If you want to know the true power of Authority Marketing, look at men like Elon Musk, Bill Gates, Jeff Bezos and Steve Jobs. They were all naturals at Authority Marketing. To find out more about how to leverage Authority Marketing, check out http://2020Powerhouse.com
There's no better feeling than starting the year off on the right track. Get your head in the game early so you're not trying to catch up later in the year. Spend one day planning each of the 11 elements above and you'll rock your 2020 targets. Remember that there are no shortcuts. Put the effort in now so you'll see faster results later.
For more information on getting assistance with hitting your 2020 profit targets, feel free to reach out to me and my team. We work with many businesses from all industries to help you implement, execute and GET RESULTS. We're more than happy to help. Just fill out the quick info below and we'll schedule a quick call to ensure it's a right fit.
It's time to CRUSH YOUR 2020 PROFIT TARGETS!!!