But, if your highest goal in your business isn’t Profit, then you’ll likely miss the mark.

Profits are Good

Profit is what distinguishes a Business from a Hobby. So, if you want to have a business, then you need to be making a Profit. Otherwise, you’re not really serious, and your very expensive business will end up being a Very, Very espensive Hobby.

Every transaction doesn’t necessarily need to be profitable, but your pricing and expense-controls need to be well-enough defined that profit is assured overall. So, at the end of the day, week, month, year, you need to be able to show a profit, or how you are at least reducing expenses to stem red-ink.

I build profit into my daily and weekly goals. I know how much of what products I need to move in which channels in order to be profitable at the end of the week.

Do you?

What About Customer Satisfaction?

Naturally, you need to find and retain customers in order for your business to grow and succeed. So, if you always put this instant’s profit ahead of the long-term profit, then you’ll end up failing or at least having a business that is difficult to sustain.

Customer Satisfaction is the engine that drives repeat business, word-of-mouth advertising, and in the long-haul, leniency when you inevitably screw up and let your customer down.

So, you’d better be offering and delivering products and services, that customers want, in ways that exceed their expectations in quality, value, and excellence.

The Bottom Line is the Bottom Line

It is important to know how every part of your business day impacts the bottom line. You need to know how much your merchandise and supplies cost, how much your labor costs rum, and what your variable and fixed expenses are.

You also need to understand how the pieces of your transactions affect that bottom line.

I worked for a time as the Operations Manager of a 50-person company. We sold $20k and up fax systems. (Yes, they really did cost that much, and there really was demand for them…) We paid the sales guys a commission on each sale, which is typical.

It seems that every day, one of them would come up with some sort of discount or free add-in for their sale that they just HAD to close. If they discounted the sale by $1,000, their commission would go down $150. I could never quite get them to understand the it also cost the company $850 in lost profits.

Think about this formula. P=S-C-E. Profit = Sales – Cost of Goods – Expenses. If all remains the same except the sales price, a reduction in the price reduces profit by the exact amount. Discounting a sale costs the bottom line.

By the same measure, not controlling costs will affect the bottom line in the same way. Ben Franklin said it best. “A penny saved is a penny earned.” Plug that penny into the Profit formula, and you’ll see – It’s True! Whodathunk???

Does this mean that you should never give a discount? Absolutely not!Discounts, Special Sales, Quantity Discounts, and the like are proven methods of generating more business.

What it Does mean, however, is that you need to account for these sorts of reductions in sales dollars in advance and in your plan, not on some impulse to generate a bump in sales. Your business needs to be able to absorb such discounts and still deliver a profit.

Conclusion

The Main Thing is to Keep the Main Thing the Main Thing… Don’t get distracted by the crush of business or the excitement of a new product line or the allure of a new set of techy-thingies. Keep your eye on Profits. Measure them. Understand them. Make them…

How have you lost track of your profits? How have you recovered from distraction? Tell me what you need to know about being profitable.

John L

So far, I am not disappointed in its performance, nor its future. I like my Xoom…!

It is lightweight. I purchased the optional case/stand for it. The added protection keeps my screen intact.

Apps are scarce for this tablet, but I find that the many Android apps seem to work fine.

Battery life? Easily 10 hours of active use.

How about typing? Well that is a problem I’ll overcome with time. The virtual keyboard is about 9 inches wide, and the keys are large enough for my chunky thumbs to be able to hit them with few misses. I guess if I was a teen texter, I would be a better typer.

I’m still exploring capability and apps. I find it like a big PDA.

Let me know what you think of Your Motorola Xoom…

JohnL

Posted from WordPress for Android on Xoom

But, without a stable Infrastructure, success will be fleeting or difficult to maintain.

What do I mean by “Infrastructure”?

I was thinking about why 3rd world countries are so poor, or so unable to make economic progress. I reasoned that the roads, utilities, markets, banking, communications, and transportation Infrastructure is the key.

Bad roads make it difficult or impossible to bring goods to markets that can’t handle volume. Finances and Banking shortcomings make it difficult or impossible to secure loans to improve business.

In short, without a sturdy and improving Infrastructure, success will be difficult or impossible.

Your Business Infrastructure

In your business, Infrastructure is all the supporting and girding you create or secure that allows your business to thrive and succeed. Without it, each day brings unexpected interruptions to the free flow of business transactions.

For example, one strut is a good accounting system. With one, you can keep track of sales, expenses, who owes you, who you owe. Without it, you fall behind on bills, labor endlessly only to find you didn’t make any money, or miss out on sales or discounts because of this faulty system.

Here are my top 10 Infrastructure pieces.

1. Accounting System
2. Filing System
3. Planning System
4. Inventory Control System
5. Collections System
6. Sales Funnel System
7. Delivery System
8. Display System
9. Followup System
10. Marketing System

I realize that some of these can be combined, but how else would I get 10???

I’ll be expanding on these as we go along. You can be thinking about them on your own. Then, you can add your thoughts in the Comments.

Make it a Great Day! Unless you had other plans…
JohnL

When I arrive at this time, I have all the intentions of evaluating what has transpired, measure it against what I planned it to be, and then make adjustments for the coming year. I have those intentions.

But, every year, I do plenty of evaluating, and plenty of planning, but the new year brings few changes.

I am like most everyone else, a man of habit. My habit is to go along and go along, and react to circumstances as they arrive. I have been a problem-solver and an emergency fixer most of my career. So, unless there is a fire to put out, I sit and idle waiting for something to happen.

To overcome this inactivity mode, I don’t use To-do lists, but rather plan a series of Projects with tight deadlines. This way, the deadlines artificially inflame my passions and cause me to press on to the goal…

Except when it doesn’t…

If I am not interested, no amount of deadlines can kindle a flame under my jets. I have to be dragged into getting it done.

What does this mean?

1. I don’t take on projects unless I am pasionate about them. Passion comes before the flame.
2. The things I don’t want to do, I can outsource or delegate. It all has to be done.
3. The passions drive me to better and better work.

Looking back, we had a pretty good year. The economy took some swings at us, but we were able to dodge them and come up even or ahead of last year. We kept a healthy business. It was good.

Looking ahead, I see that I will find more passionate areas to pursue, and I’ll have a fantastic year ahead.

I hope you do, too…

You’ve heard it over and over, “The Money is in the List”, followed by some sort of pitch for a list-building product or system.

That’s what Internet Marketers have been pitching for years… And, in a general sense, they are absolutely correct. If you don’t have a list of prospects or customers, you will not be able to generate as much revenue as you can without one.

All Lists are not created equal.

But, having a list and having a Good List are not the same thing.

Some companies make their living by providing lists. They collect email addresses and contact information using their specialized methods, and then offer them to you for a price. It is a good business model, one that has been around for decades. Someone wants to promote to a certain market, and these lists can help.

But, regardless of how well-targeted they are, each of those contacts on the list are cold-calls for you. None of them have ever heard of you, let alone be interested in anything you have to say. These aren’t Prospects, they’re Suspects. I suspect you’ll not get much Respect from them.

Your approach to this list is like tossing mud against the wall and seeing how much will stick. What a great way to treat your potential customers.

The Real List

Your Real List is one that contains people who know you – who have elected to hear from you – at least once. They are receptive to an approach if not an offer. They are Prospects, not Suspects.

You get these Prospects by enticing them to Opt IN to your newsletter, or email tips or to get your free Report. You have built in them enough interest or trust that they WANT to hear more from you.

Instead of finding them and cold-calling until they submit, they have found you through their interest in your niche. They sought your topic out of the Internet, and here they are. NOW you get to impress them with your knowledge and command of the topic – your Authority.

The Money Is In the Relationships

It is better to have the name of someone who knows you than is is to have just a name. It is better to get them to know you through meaningful contacts than to bulk-blast them with junk.

As you collect names of those interested in your topic, you begin to develop in them a special relationship. You are helpful. you are interesting, you are unique. You continue to tell the truth.

You can’t force them to become your friend, but you can help them trust you and your information.

Trust Is the Crucial Key.

Everybody wants to make a sale. Not everybody wants to make an effort.

It takes dedication and long hours devoted to building trusting business relationships. Trust is hard to develop and easy to lose. Your battle is not with your competitors, but with yourself. You need to be truthful and trusting at every turn.

Claim to have a guarantee? Better honor it faster than you promise. Claim to show the true path? Better have all the trail signs in place and complete. Claim to be interested in their success? Better prove it by offering success tools.

Step away from any one of your promises for even a second, and BAM! your trust dissolves. And you won’t get a second chance to rebuild it.

Make New Friends, but Keep the Old.

This comes from a song we used to sing around the campfires. One is Silver, and the Other is Gold. And you can’t tell the difference.

As you establish relationships, make it your goal to be friendly and helpful, and to retain as many Prospects on your list as possible. Keep them by offering them truth and value.

Establish routines that allow you to contact them with useful information. Keep your interactions low-key, and don’t flood their inbox with selling.

And seek out new Prospects. Always be prospecting, and converting them into fans.

Conclusion

It isn’t the LIST, it’s who is IN the list. If they seek you out, don’t let them down. Treat them like you want to be treated.

Why Not?

Because I regularly confuse Activity with Productivity.

Productivity

Productivity is the execution of events or processes that accomplish progress towards goals. Productivity is getting the RIGHT stuff done. Productivity adds Value to your life.

When I am productive, I end the day feeling good about what got done. When I am productive, I can see the pile of un-done, important work shrink in size. When I am productive, my bank account gets refreshed.

Productivity is the science of Getting Stuff Done. But it is getting the Right Stuff done that is important.

Activity

Why do I see just random action, or even focused action without connection to any goals, as effective, or even desirable at all? I can sit all day long, checking email, surfing around a bit, shuffling papers, day-dreaming (I mean brainstorming) and KNOW that I should be doing something else – and yet, not do it.

What’s with that?

What am I trying to avoid? Do I see that real productivity is somehow going to interfere with my freedom? My freedom to choose what to do? My freedom to be a lazy slug? My freedom to spiral into mediocrity?

Solution

I’m certainly the one in charge of my day. What better way to use it than to move down the road a little farther?!? After all, if the goal is worthy, the journey is fulfilling.

The solution is to train my mind to reject activity to pass the time. The solution is to train my mind to use age-old, proven tools to keep myself on track. The solution is to grow up and get on with life.

Start with the End in mind. Make a Written Plan for how to reach that End. Break that Plan into Daily chunks. Put that Daily Chunk before me so I can focus on it. Take the first step, this day, on today’s most important activity – being productive.;

My Goal?

What is my goal? At this stage in my life, I only want to run strong after the Lord. I’ve raised my family, I’ve had my career, I’ve made my fortune. Now, I have the time-freedom and the financial means to accomplish things I passed over in the years behind me.

I can now hear the voice of the Lord calling me to help other people get their lives in order by getting out of debt. I have the knowledge. I have the skills. I have the Attitude.

I now need to develop the tools.

Conclusion

If you spend your days in foggy confusion, being busy all day, but in the end, doing nothing, then you need to fix it.

What do you really want out of life? What is the most important thing you can be doing, this minute, to make a difference in your life and the lives of others? What should you be doing, Right Now, to get farther down the road to your goal?

Mark it down. Keep it posted. Get Stuff Done.

JohnL

Turns out I’m OK, but that doesn’t end the concern.

I naturally thought about how my personal health affects the health of my business. Then, about business health in general. How do you measure and improve it?

Attributes of a Healthy Business

What is it about a business that marks it as healthy? What characteristics make it ready for the long haul? What are the indicators to watch for to remain healthy?

1. Profits – At the end of any given day, a business has to be making a profit, or it won’t survive. Look at GM and Chrysler, lately. They have sustained massive losses over the years. They can’t make it up in volume. They finally had to bow to the truth and file Chapter 11 Bankruptcy. I don’t foresee those losses ever being earned back, let alone being paid back to the out-of-luck lenders.

Make sure you have a suitable bookkeeping system in place, and stay up-to-date on the entries. Be sure to pull an Income Statement every month, or every quarter at the latest. This statement allows you to look back on how your operations fared in the marketplace.

Profits? Good news. Are they enough? That’s the next indicator.

2. Plan – Do you have a Business Plan, and are you keeping up with it? Do you regularly review the Plan’s action steps? Do you update the Plan with new information? Are you keeping pace with the projections? If not, why not?

Do you have a Weekly and Daily Plan to work from? Do you know what you are going to be doing, today, to improve your business?

3. People – Are your employees helping your business, or are they hindering it? Do you have a hiring plan in place, or do you hire randomly? Do you have a defined and routine employee evaluation process? When you find an employee who is below par, do you coach them to improvement? Do you replace them if it doesn’t work out? Or do you collect dead wood – holding on to dud employees for a later fire sale when you go out of business?

4. Customers – Is your customer base growing? Are you serving more and more customers with better and better service? Do you have a Referral program or Loyalty program in place? Does your sales process capture customer information so you can follow up with them with later contacts?

What Else Measures Health?

This basic list of attributes will help you start measuring your business health. There are many more you can use depending on your business.

What are some of the ways YOU measure business health?

JohnL

I usually get the coffee started and then open the house & curtains, and get the paper. Then I sit down at my PC and start the day.

Today was different.

After opening the house, and before sitting at my PC, I put in a few minutes just thinking about what needed to be completed by the end of the day. I thought about what processes I would employ during the day. I thought about how to avoid the time-sinks that each of us has – mine unique to me, but identical to yours.

During this time, I also thought about what I wanted this week to look like at the end of it. How would it stand up to backward scrutiny? What did I want to be able to write down as accomplishments during a weekly review?

That few minutes of reflection helped me stay on track for longer than usual, and I got quite a bit done that I might not have, otherwise.

I put in the time pre-planning my day.

What’s the big deal? Doesn’t everybody do this?

No.

Most people go through the day allowing random circumstances and events to sway their course and dictate their responses. Most people do NOT plan their day, but allow others to do it for them. In fact, most people EXPECT to have others tell them what needs to be done, and when.

The problem with this for the entrepreneur is that there is nobody to do this for you. Sure, the customer will have plenty to tell you, but that core response is why you are in business. In order to make your business more effective and you more successful, you have to spend time outside of customer-satisfying activities to plan and do improvement projects.

If you don’t take the time, you won’t do the work. it will slip away until the daylight fades with your willpower along with it. The lost opportunity to do SOME-thing to improve will cost you in the long run.

Put in the Time every day, to figure out at least ONE project you can complete that will have a positive effect on your business. Just One.

I’m going to do it again in the morning… How about you?

John L

 Congratulations on stepping out for more independence. We’ve been selling online for about 5 years, and find the freedom and flexibility it gives us to be wonderful. I hope you can weather the frustrations (like you’ve encountered early) and reach some profitability. I’m happy to help as I can.

We personally don’t do any drop-shipping, but we try to own and ship our own products. However, I usually advise that you begin by selling a product that people buy… (An author once wrote about writing… “I usually try to leave out the words that people don’t read…)

Success in online marketing is the same as in a regular store: Have the Right Product at the Right Price at the Right Time.

I’m  pretty confident that just about anything you select as viable will continue to sell during recessions. If you had a regular store, then I’d worry. But, the Internet is such a great, big, pool of potential customers, that you’ll pretty much always find plenty of people whose life-decisions have included your product as an essential purchase.

But, selecting products (or first markets) is the most important decision to make in launching any business. Online is no different. I usually advise that you begin the process by writing down areas that you enjoy or that you know something about. You can sell what you know better than what you know nothing about. Credibility and authority are vital in an online business.

For example, I know about and enjoy tools and wood-crafting, but I don’t much enjoy fabric and sewing. (Sandi does.) Both are sort of crafty and creative, but different people are attracted to each of these areas, and not many are attracted to both. This begins to define an available market for me to try to serve. Your list should include several to choose from. 

Next, I think of all the kinds of problems, or solutions to problems, or gaps in what the market offers inside this market area. I try not to think from my own perspective, but from the general public. (A fisherman doesn’t bait his hook with food the fisherman likes, but with food the fish like…)

I look online for forums or blogs that specialize in my selected market, and I review the postings and comments – looking for these gaps or opportunities. Look on Yahoo Answers to see what people might be looking for to buy. This is all valuable research that will help you zero in on the right products to evaluate.

Then, you can begin to evaluate products in terms of price, profitability, and marketing methods.

Your Market comes before Product. Potential Profits come before Products.

Now, removing your own thoughts and feelings about what might be “cool” or desirable, select your product(s) to begin selling. Your market should determine the products, not you. You are only one out of the potential thousands of customers you need to please.

I hope this is helpful. Please let me know how else I can help.

John L