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    Pride vs. Profit – Which Is More Important?

    Opinions expressed by todaybusinessupdates.com contributors are their own.

    I work with many entrepreneurs in many different industries from pizza making to house making. And they all have a very different take 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 under, but my company did so well that I gained national recognition for my results, and other entrepreneurs in my industry called me for business advice. (Man, I was so cool.) But I also found that there were a lot of different mindsets to contend with as I worked my way up to a higher level of success.

    The industry was martial arts, and there were a lot of people who felt that making money for services rendered was almost criminal behavior – as if violating some kind of code of honor by actually making a living running a business. But I’ve noticed that I wasn’t the only one dealing with that mentality. Many industries such as yoga studios, fitness/health clubs, handymen, auto repair shops, restaurants and so on have the same mindset.

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

    Related: 3 Signs You’re Letting Pride In The Way Of Being Successful

    Pride

    Although pride has been labeled negative by the Seven Deadly Sins, it can actually go either way. When you were a kid you were told to take pride in your work, work hard, provide top quality service, take pride in how you dress, etc. These are all great examples of the good use of pride, but when you refuse to charge for your services at a competitive rate because you think you are doing something wrong by raising money, and then your company and/or family suffer as a result of that choice? THAT is a good example of the negative use of pride.

    This is the same mindset of entrepreneurs who say things like “I can’t believe they (who “they”) let Jeff Bezos and Mark Zuckerberg make so much money!” I’m not kidding, I’ve heard this several times. Jealousy? Maybe, but I think it also reflects why the same owners struggle year after year. They feel that making money is somehow wrong, and they use the excuse that they “feel” themselves better because they don’t make much money. They feel that they are ‘not like those bad businessmen and women who make so much money’.

    I just don’t get it. Why let your family, your employees, your ability to take vacations and your retirement account suffer so that you feel “good” because you are NOT a profit generating company? There is no logic in that thinking, and there is nothing wrong with earning a good living.

    Here are some ways to avoid the pitfall of pride:

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

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

    • Learn to deal with any guilt about cashing in.

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

    • Get a realistic figure on how much you need for retirement.

    • Plan your vacations and have costs associated with them so that you can work towards them.

    • Make a plan now to sell your business and get an idea of ​​how much it is worth.

    • Set a goal for monthly profit usage. Here are a few ideas:

      • Employee night out

      • Family night out

      • Family holiday

      • Special gift for your significant other

      • Employee Bonuses

      • Employee raises

      • More employees

      • Larger or more locations

      • Renovation

      • Store location improvement

      • Computer/Software Upgrade

      • Increased/improved marketing

      • Hiring new employees

    Related: Understanding Profit in Your Business

    Gain

    Now that you better understand how pride can get in the way of making a profit, let’s talk about some simple steps you can take to see a profit as soon as possible.

    Some of the suggestions may be easy and others may be difficult. Please don’t just skip something because it’s hard. For example, depending on where your company needs more money, consider letting a few employees go and do the tasks yourself. It may suck for a year or so, but you’ll see improvements in cash flow right away. This is a harsh reality for many entrepreneurs, but it makes no sense for your family to hire employees you can’t afford when the company goes bankrupt.

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

    • Let go of employees who are not critical and pick up that work yourself.

    • Let go of all underperforming employees.

    • Shop for ANY service you use: internet, phone, insurance, rental, etc.

    • Refinance your home, cars, etc.

    • Renegotiate your rent with your landlord.

    • Moving to a smaller/cheaper location.

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

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

    • Create a campaign to get former customers back.

    • Create a campaign to acquire new customers.

    • Create referral programs.

    • Take sales courses.

    • Have your employees take sales courses.

    • Create COIs — Centers of Influence.

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

    PRO TIP: A helpful idea is to know what the end game is for your business. Are you going to pass it on to your kids? Do they want the company? Are you selling the company? Will you close the doors? By knowing the end goal, you can properly plan which steps are most critical right now, such as letting go of non-essential/underperforming employees, to achieve that goal. If you are going to sell it, you need to make a profit every year to increase the value of the company. No one will buy your business if there is no profit. So don’t shoot yourself in the foot by letting pride control your business income. Make as much profit as possible AND feel damn good about it too.

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