Today We Break Down How to Make Your $100,000 in Profit
In this Episode we walk you through the 8 steps that you can take to get your local small business to $100,000 in Profit!
Listen to the Episode Above
Here are the Show Notes from the Episode:
Episode 4 – Part 2 – Can Local Small Business Owners Make $100,000 in Profit?
Welcome back to the Local Small Business Coach Podcast, I am your coach Tammy Adams.
So in episode 4, we are going jump into Part 2 of Can Local Small Business Owners Make $100,000 in Profit?
In episode 3 we spent some time breaking down how to figure out how much you need to sell to hit your $100,000 profit. I know it was a number’s filled episode but hopefully you got a lot of insight into profit margins and how it impacts your business.
If you missed the episode, head on over to episode 3 to learn how to figure out the sales needed in your business to hit your $100,000 goal.
After doing the episode, I realized how much I need to convert that episode into a mini training course to help show folks how to walk through those numbers visually. So keep an eye out for that. I’ll put something together soon and get it up at our training site over at TrainingForLocalSmallBusinessOwners.com. This is where I will house the various training courses and other tools for you and your local small business that we create during our time together to help you with your local small business.
The challenge I’m running into right now is balancing the podcast, creating the tools I know everyone needs or wants and doing my day business. But I’m having so much fun that I’ll keep working on knocking out as many tools as I can for you.
As I record this episode, I’m actually putting the final touches on a new course I’ve been working on.
Over on the TrainingForLocalSmallBusinessOwners.com website, I actually have a whole section dedicated to those looking to start a local small business.
I have all kinds of free tools to help folks get their business going. But since folks have been asking for a more in-depth class, I’ve been putting together a paid course that is very reasonable but is packed full of content and tools & resources.
So far I have 12 modules, I think 50 mini videos and 13 downloadable tools a person can use to start their local small business and start off on the right track towards the $100,000 profit we are talking about today.
If you want to check it out or know someone who is thinking of starting a local small business, then just have them head over to StartALocalSmallBusiness.com. For under $100 they will get all that cool stuff to get them from Concept to Open for Business.
Going forward, my energy will be focused on the free materials I want to develop for those already in business which is the vast majority of you. As we address your concerns and questions, I’m getting a good feel for what you are needing first. The problem is, my head is exploding with all the cool stuff I hope to do. Never mind that I might even get into some one on one coaching at some point. Ultimately I hope to do this full time.
Ok, enough about that, time to dive into part 2 of how existing local small business owners can tweak their business and start working towards that $100,000 profit.
So, after our last episode you should have an idea of what you need to do in sales to hit your $100,000 profit target. Now, getting to this target, is going to be the accumulati
on of a lot of little things you will do. But let’s concentrate on 8 Steps that should get you there.
Step 1 – You must set aside 2-3 hours a week to start working ON your business and not just IN your business.
You might recall we discussed this in more detail in episode 2. The reason I had this in an earlier episode is because it is going to be a crucial step into setting aside the time you need to work on your marketing, your systems and other critical areas of your business.
As long as 99% of your time is spent on the “doing” you will never grow beyond your current capacity. So this step is a very important part of your game plan.
So when is the best time to schedule this? Ideally, you would spend your first hour of each day working on your business. However, some of you must get an early start so then set aside time at the end of the day. Worse case, set aside your first few hours on Monday or time on Sunday afternoon.
Remember, you need to make this time a habit. The best way to make it a habit is to pick the same time each day or week. Whatever you pick, make sure you fully commit and block your calendar during this time. Make it a sacred part of your week.
Step 2 – You need to Identify the gap between what you are currently doing today in sales and what you are needing to do to hit your target. So for example, let’s say you are bringing home $5,000 a month or $60,000 a year profit. So we know you need to grow your business by $40,000 in profit.
We also know that your existing sales are around $125,000 and that covers both your expenses and the $60,000 in profit.
In yesterday’s exercise you realized you need to take your business from $125,000 in sales to $230,000 to hit your new $100,000 goal plus expenses.
So you need $105,000 more in sales annually or $8.700 a month.
Ok, I know I promised you no more math but since some of you didn’t figure this out earlier, we need to make sure you do it. LOL
Step 3 – Now that you know your need, it is time to Create some Sales Ideas
How are you going to build your sales to hit this new number? Later we will look at costs but in this step, just focus ways you can increase your sales. Now, take off your “I can’t hat”.
I want you dreaming just like you did when you first started your business. You remember how you thought you could tackle the world and nothing was off limits. I want you thinking just like that. Toss out all your ideas.
Don’t get hung up on having no time to do these additional sales, we will cover that later. For now, just capture it all.
Some areas to look at would be…
What are products you can add to your mix?
What services can you add?
One of the best things you can do, is think of what “add on” products can you sell.
I’ll give you a great example. I have a septic tank at my house. So, when I’ve had it pumped, our local guy offers a septic tank product that you just drop in once a month to help with the bacteria. It costs around $35 if I recall.
While I could easily get some septic stuff at the store, at that very moment, I’m really primed to buy his add on product since it is right there and top of mind.
So, what products would make great add on items in your business?
The nice thing about add on products is, they typically have a higher margin. Therefore, they help you towards you goal much faster.
Another great example might be offering an extended warranty on your products or services. There is a reason why the big box retailers offer one on so many items. Heck, if you go to Walmart, they offer them on items that only cost $20. It is getting out of control. Who would pay an additional 10% for something they will probably never use? Believe it or not, a lot of folks. This is a huge profit maker for these folks.
Why do they do this? Well, the odds of someone using the warranty is slim and since it is almost 100% profit on most transactions it is a great money maker for them. So as part of your brainstorming, what could you offer a warranty on?
Another type of warranty you could offer might be to come out in a year to recheck the work you did as a type of extended warranty plan. For a $50 add on and 10 minutes of time. You could have a good sales and profit funnel.
The key is to think outside of the box.
Step 4 – Time to Develop a Gameplan with your Sales ideas
Once you have a nice healthy list of ideas to drive sales, it is time to start figuring out what it will take get those sales.
Once again, don’t get hung up on having the time and how you are going to do it. That is coming up in a later step. This step is all about figuring out how you can drive those sales.
What does your marketing plan need to look like? Do you need Facebook ads? Local newspaper ads? Following up with past clients? Toss out tons of ways you can drive those sales ideas.
In the earlier step, you might have discovered a great add on idea. So in this gameplan section you might write something like, for every X Service you will push Y Add On. What type of success rate do you need.
For example, if you were that septic person, and you did 4 septic pumps a day and you could get 1 out of every 4 clients to purchase that septic bacteria dose at $35 a pop, that would lead to a possible extra $175 a week or $9,000 a year assuming a 5-day work week. If his business grew to 7 days a week that could be an additional $12,700 a year!
Never underestimate the power of those add on items. You just need a gameplan on how you will drive those sales.
Another item to look at is your website. Can it be improved to drive more sales? Put this in your gameplan as well. Same thing is you could leverage any social media? Some businesses do very well for example with instragram.
There is a local guy in my small town that uses the power of Facebook pages really well. By just being friendly on them and providing great service in his business, he is the first name that is tossed out when people are looking for someone that needs a mechanic. For a few moments a day, he has tripled his business and hired a team to keep up with it. Imagine what could you do?
Step 5 – Look for ways to reduce your costs and expenses
There are three ways to increase your profit. One way is to increase your sales but with the same costs. Another way is to Sell the same as you do now, but at a reduced cost. And the third way is a combination of both. In our plan we are attacking both sides. So in this step we are going to attack the costs and expenses side of your business.
First you will want to take a close look at your expenses. Are there areas that you are over spending or not watching. A typical expense that gets wasted with local small business owners for example is gas. If you have to run to Home Depot or Lowes multiple times during a job, you are wasting both time and gas. Same if you have to run to your shop or home for tools.
Maybe your losing money due to not collecting your invoices due to poor follow up? I can’t tell you how many business owners fail to not follow up on their invoices. Even worse are those that never send the bill out in the first place. In real estate we use use venders to help our clients around their home. I can’t tell you how many of them never bill our clients for those services. I’m always amazed at how much business is never paid for.
As for costs. How can you get your products cheaper? For example, local hardware stores tend to charge more than the big box retailers. I’m all about shopping local but if you are already at a big box retailer, get all you need for upcoming jobs.
Are there other suppliers you could use?
Is your money tied up in too much inventory? Inventory that you aren’t using in the next few weeks is like having dollar bills just sitting on the shelf. Can you buy better?
Are you losing money due to waste? For example cutting things wrong or buying the wrong stuff that you can’t return.
If you own a QSR or restaurant, are your employees putting too much food on the plate or in the food? Are your food costs are too high? Do you even know your food costs?
Think of all the holes in your business. In a future episode we will be diving into this area a little more.
Step 6 – Identify Core Processes that Are broken in your business
Now it is time to start identifying ways to come up with more time to do your additional sales.
One of the best ways to come up with time is to identify any core processes that are broken in your business or that can be improved.
What are things you do over and over and could automate more?
Instead of running back and forth every day to a supplier, can you go once a week?
Instead of spending hours on your quotes, can you create a spreadsheet that contains all the parts you need to speed up the process?
Are you answering the same question over and over? Can you put the answer on your website or on your bids?
You will be amazed at how much time is lost due to repetitive action items. If you don’t believe me, track this for a week and see how much you address over and over.
Another great way to save time is to think of all the areas that you hate doing because they take so much time. How can you make them quicker?
If your book keeping is taking hours, maybe it might be time to hire someone to help out?
Sure this will add to your costs, but you might find that by freeing up your time, you can knock out an extra job a week and it will pay for this person plus you will still have time to spare to create even more sales. Which now leads us to step 7.
Step 7 – You need to identify what resources you need to achieve the gameplan you have been building.
You might recall in our last episode we discussed how much your time is worth. We said your time might be worth $50 an hour. So if you have processes that you could pay $10 – $15 an hour for, you might find replacing you in that task is worth it.
Let’s use the example of getting a bookkeeper. If you hired someone part time for 10 hours a week to process your bookkeeping and invoices and you paid them $10 an hour you are looking at $100 a week. If your time is worth $50 an hour due to what you can produce in sales, those 10 hours a week you pick up are worth $500. So you can easily pay this new bookkeeper plus have more profits and sales to boot.
Maybe there is an online program online that will help streamline some of your other processes. For example a better quoting system. Maybe by investing in your website you will get more sales. You might need help creating your marketing materials.
Look through your gameplan you are creating. What are the tools, resources, & people that will help you hit your goals?
Word of caution though, keep that I CAN’T HAT on the shelf. Fight the urge to say I CAN’t or I can never afford that. That type of thinking isn’t going to get you to $100,000! Trust me, you will find a way if you really know it will have a great return on your investment. You just need to have a plan.
Which brings us to our 8th and Final Step – YOU MUST SEE YOURSELF AS A $100,000 PROFIT BUSINESS.
Far too often you are your own limiter as to what you can accomplish. If you don’t believe you can, you won’t. If you don’t think like a $100,000 profit business you will never become one.
You can’t think about all the reasons you can’t do it, but rather you need to see them as hurdles and think of solutions to the problem. They aren’t a wall you can’t penetrate. You just need to think of how you will put in a gate.
Your mindset is half the battle to you getting to a $100,000 profit.
If you don’t believe me, I want to challenge you to spend the next week really believing you are a $100,000 business. If by the end of the week, you aren’t seeing big changes in how you do business then fine, go back to your old ways. But I bet you will see and feel the difference when you believe in your heart you are a $100,000 profit business.
Heck, for most of you, I challenge you to think even bigger. If you really want to build one heck of a business, dream even bigger. Can you see yourself possibly running a million dollar business?
Having a team of folks or various crews doing helping your clients or customers? Maybe you have a brick and mortar that you can pump out some serious sales. Heck, maybe you have visions of creating a franchise in the future.
I dare you to believe in your heart that you are running a million-dollar business. If you did, you make different choices vs small mom and pop ones.
Sure you might be doing $75,000 today but you are just slowly building your own empire.
But if all you want is a small business, there is no problem. Lots of folks just want a great business that provides them the lifestyle they want. The freedom to spend time with their family and work when they want. Either way, you need to see it and believe it and then think like a $100,000 profit business. How would you run your business differently?
Ok, time to bring this episode to a close. Hopefully your head is swimming with ideas on how you can get your business to $100,000 in profit.
Remember, it all starts with you sitting down that first time to work ON your business. Then about working on your plan each week. You can do amazing things when you have a plan.
Now to help get you going, head on over to the show notes at LocalSmallBusinessCoach.com/episode4 to get a workbook that I’ve put together to help walk you through all 8 steps to discover how you get to your $100,000 plus in profit. Once again, you can find that at LocalSmallBusinessCoach.com/episode4
Hopefully you have found the last 2 episodes helpful in jump starting your thought process on how you can increase your sales and your profits and take your business to that $100,000 a month profit.
Going forward, I will continue to put thing in place to help you along the way. We will also revisit some of these steps in more detail to spark even more ideas.
So until next time, remember, if you like what we are taking about, then make sure to subscribe to the podcast so you don’t miss an episode
And if you love the podcast and what we are talking about, then please leave a 5 star review so other local small business owners know this is a podcast that they can’t miss.
Also don’t forget to visit the website at LocalSmallBusinessCoach.com to leave your question for me to possibly answer on the podcast in the future. You can leave it via the speakpipe button or just shoot me an email. Coming soon I will begin answering your questions on the podcast.
See you on our next episode…Bye for now…..
FREE TOOL MENTIONED IN THE PODCAST —>>> Free Spreadsheet
Have a Question You Want Asked on Air? Shoot Me Your Question
Podcast Website: LocalSmallBusinessCoach.com
Leave your Message on the website with the SpeakPipe Button or just email me at Tammy@LocalSmallBusinessCoach.com
Episode Show Notes: Episode 4 – Local Small Business Coach Podcast
Episode 4 Freebie – 8 Steps Workbook to Hit Your Profit Goals
Our Training Materials for Local Small Business Owners: TrainingforLocalSmallBusinessOwners.com
Starting a Local Small Business Website: StartALocalSmallBusiness.com
My Recommended Bookkeeping Program for Local Small Business Owners: Freshbooks Link
Why? Helps you invoice quicker and more importantly, get paid quicker. Let’s you know when your clients have opened the email and they even help send reminders. Clients / customers can pay right from their phone or computer. Give it a Try: Freshbooks
**Freshbooks is an affiliate link. This costs you nothing. I only recommend due to how much folks have loved it. I am paid a small commission but trust me. Even I use it. Try it for free for 30 days and see if you don’t love it too![/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]