Pride versus Profit – Which is more important?

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I work with many business owners in many different industries, from pizza making to home building. And all of them have very different views on the same subject: making money.

I opened my first business, because the guy I worked for was a complete (fill in the blank). I knew how to run the business, provide better customer service, and produce a better product, so I did. And wow, that was a great idea! Not only did he go bankrupt, but my business was so successful that my results were recognized nationally, and other business owners in my industry were calling me for business advice. (Man, I was so cool.) But I also discovered that there were a lot of different mindsets to contend with as I progressed to a higher level of success.

The industry was one of martial arts, and many people felt that earning money for the services provided was akin to criminal behavior – as if it violated some sort of honor code by living from running a business. . But I discovered that I was not the only one to face this mentality. Many industries, like yoga studios, fitness/health clubs, DIYers, auto repair, restaurants and so on, have the same mentality.

Why? Why is there anything wrong with making a good living owning and operating your business? Isn’t that the American dream? Many people will simply choose their pride over making a profit – a profit that helps feed their families, pay their bills, and save for retirement.

Related: 3 signs you’re letting pride keep you from succeeding

Pride

Although pride has been referred to as a negative by the seven deadly sins, it can actually go both ways. When you were a child, you were told to take pride in your work, to work hard, to provide top quality service, to be proud of the way you dress, etc. These are all great examples of the good use of pride, but when you refuse to charge a fair price for your services at a competitive rate, because you feel you are doing something wrong by raising money, and your business and/or your family suffers from this choice? This is a prime example of the negative use of pride.

It’s the same mindset of business owners who say things like “I can’t believe they (whoever they are) are letting Jeff Bezos and Mark Zuckerberg make so much money!” I’m not kidding, I’ve heard this many times. Jealousy? Maybe, but I think it also reflects why these same owners struggle year after year. They feel like making money is wrong, and they use the excuse that they “feel” better about themselves, because they don’t make a lot of money. They feel that they are “not like those evil businessmen and women who make so much money”.

I just don’t understand. Why make your family, your employees, your ability to take vacations, and your retirement account suffer so much that you “feel good” about NOT being like a profit-making business? There is no logic in this thought, and there is nothing wrong to earn a good living.

Here are some ways to avoid the pride trap:

  • Charge just above your industry/region average for your services.

  • Feel good that every customer gets the best service in town.

  • Learn to deal with the guilt you feel about raising money.

  • Focus on the good things you can do with the money you earn.

  • Get a realistic figure of how much you will need for your retirement.

  • Plan your vacation and have a cost so you can work there.

  • Make a plan now to sell your business and get an idea of ​​its value.

  • Set a goal for monthly profit uses. Here are some ideas:

    • Employee party

    • Family evening

    • Family holidays

    • Special gift for your significant other

    • Employee bonuses

    • The employee increases

    • More employees

    • Larger or more pitches

    • Home improvement

    • Improved retail location

    • Computer/software upgrade

    • Increased/Improved Marketing

    • Hire new employees

Related: Understanding Profit in Your Business

Profit

Now that you have a better understanding of how pride can get in the way of making a profit, let’s talk about some simple steps to follow to get you seeing a profit as quickly as possible.

Some of the suggestions may be easy, and some may be difficult. Please don’t skip something because it’s difficult. For example, depending on where your business needs more funds, you may need to consider laying off a few employees and doing the tasks yourself. It might be zero for about a year, but you will immediately see improvements in cash flow. It’s a harsh reality for many business owners, but it doesn’t do your family any good to keep employees you can’t afford when the business is in danger of going bankrupt.

Keep in mind that there are only two ways to increase profits: reduce expenses and increase income (sales). Try to do both at the same time.

  • Let go of all non-critical employees and take on this job yourself.

  • Let go of underperforming employees.

  • Shop for ALL the services you use: Internet, phone, insurance, rent, etc.

  • Refinance your house, your cars, etc.

  • Renegotiate your rent with your landlord.

  • Move to a smaller/cheaper location.

  • Sell ​​equipment you don’t need/use.

  • Increase your rates by at least 10% (to start).

  • Create a campaign to recover former customers.

  • Create a campaign to increase the number of new customers.

  • Create sponsorship programs.

  • Take sales courses.

  • Ask your employees to take sales courses.

  • Create COI — Centers of Influence.

  • Improve your web presence: website, Google reviews, etc.

PRO TIP: A useful idea is to know what the end game is for your business. Will you pass it on to your children? Do they even want the business? Are you going to sell the business? Are you just going to close the doors? By knowing the end goal, you can properly plan the most critical steps to take now, like letting go of non-essential/low-performing employees, to achieve that goal. If you are going to sell it, you need to generate profit every year to increase the value of the business. No one will buy your business if there is no profit. So don’t shoot yourself in the foot by allowing pride to control your business revenue. Make as much profit as possible AND feel great too.

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