Do you measure your profit?
This may seem like a silly question to ask on a blog where almost all of my readers are entrepreneurs or other CPAs… but it’s really a pretty serious (read: important) question.
Truth is, I’ve come across a fair share of entrepreneurs whom, when approached by the question: “what would you like to improve in your business?” they’d respond with something along the lines of: “to increase profit.” Then my second question will be something similar to, “well, do you know how much profit you are making now?” And you’d be surprised with the diversity of the answers I get.
Take a moment and think about this. Do you know how much money you are making on a weekly, monthly or quarterly basis? Do you know what it cost you to ship that last order of 150 dozen watches? What if we’ve shipped them via FedEx instead of UPS – would you have made more money? How much? Is it significant enough for us to care?
If not, would it have made a difference if this was a repeat order that’ll happen once a month from now on? Think about it. Are you really measuring your profit? So, if you are not tracking to see how much money you are making (and where you are making it,) then how do you expect to increase it? Measure your profit. It’s the first step to increasing your profit.