The First Step to Building Profits

It is important to understand that in order to build profits, a profit must first be earned. If your business is a start-up or has been losing money, the main focus of all your activity is to make a profit.. not  just any profit, but a cash profit. Cash profit is where your cash balance is growing after you cover all your expenses whether they be paid daily, weekly, monthly, quarterly or annually.

If your business is not in a cash profit situation, you will not be able to stay in business indefinitely.  There will be a point when you run out of cash and you have to close your door. In the Proof of Concept article I mentioned Twitter as an example of a company whose business model is exciting but whose excitement will eventually die if it does not turn profitable.

One of the best ways to begin making a cash profit and then make even higher cash profits, is to develop a financial performance picture twelve months in advance. This financial picture is how you want you business to look financially a year from now. I always advise clients when doing this work to look at what the business has been able to earn in the past and then increase it  significantly.

Individuals  use a technique know as vision boards to focus on things they want including lifestyle improvements. The financial model of what you want your business to look like is your business vision board. “If you can see it you can achieve it.”

There is more to it than creating a picture twelve months out but that is a key starting point.  For purposes of building profits I do not advocate going beyond a twelve month horizon as there are two many variables.  However, when doing strategic planning a more forward outlook is appropriate.  For now we are focused on building profits near term.

Sending you energy of health, happiness, prosperity

Steve Pohlit

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About: Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies.  Steve is a business owner and an expert business consultant focused on building profits and net asset value. He is very experienced with Internet marketing and social media marketing.  All articles published by Steve unless specifically restricted may be freely published with this resource information.

Author: Steve Pohlit

Independent BEMER Distributor Real Estate Investor Business and Real Estate Coach, Consultant Professional Speaker, Author

10 thoughts on “The First Step to Building Profits”

  1. As A Grammy-nominated songwriter I was used to dealing in 3-minute increments and deciding on what song to write next only after finishing the one I was working on at the time.

    Planning 12 months ahead was unheard of to me and I suffered in my business starting out because of it. I couldn’t agree more with you. Planning is REALLY important for profits!

  2. Thanks Steve. I heard of vision boards from the “Secret”; it is a very helpful tool. If not for getting everything right away, but to help plan your immediate future. In graphic design, we also use vision (or mood) boards, to help create strong branding identity for our clients. I think it’s important to have good design, no matter if your company is just starting out or has been in business for a long time. Feel free to visit my website, http://www.rhythmbehavior.com/, and give me a call to get your logo, business cards, or website professionally designed and up & running. Good luck to all!

  3. @Ellen Violette
    Well well well, are we talking about making mental visions
    and waiting for our lives to turn this mental mould into
    reality or what???
    The place I a right now, i need a miracle and I have been told
    now and again to pray as hard as I can and it is these same people
    who say praying is not the practical approach.;=)

  4. Super info. Some people starting out in business just don’t understand that you can’t function indefinitely without turning a profit. You have to sell something to make money. That’s the bottom line. Good post!

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