Jack Mencini and Adam Sonnhalter would like to rid the business world of the word: Budget. The budget mind set creates a vision of Jack Nicholson in a straightjacket when he starred in the movie, One Flew Over the Cuckoos Nest. Just like Jack Nicholson’s straightjacket, these small business coaches for Maximum Value Partners (www.maximumvp.com) feel that a budget binds you and is an old, dusty accounting term that has so many negative connotations. They like the word: PROFIT Plan. Isn’t profit so much more exciting to think about than spending (or not spending) money?
In this week’s episode of Dirty Secrets of Small Business at 7:30pm (EST) on WINT Radio 1330 AM and 101.5 FM every Wednesday, the cohosts of the show, Jack and Adam tackle this How Question How do I get rid of a budget mind set?
As an example, Adam tells the story about one of their clients, “Bill,” who before owning his own business worked at a government agency. Bill was really excited one day when he went to his boss with the great news that he found a way to save his department $70,000 dollars in their budget. Bill had outlined his research and due diligence for how to go about saving the $70K and had all the info in a file folder he handed to his boss. Rather than being overjoyed with this news, his boss pushed the folder away and told him that he should find a way to not only spend the $70K in savings he found, but find an additional $100,000 to spend, otherwise they would lose the money for the next budget. Bill couldn’t believe his ears, but he did as he was told and it wasn’t too long after that when he decided the politics of dealing with budgets was not for him and went on to launch his own business to concentrate on a Profit Plan.
Having a profit mindset means that you don’t spend yourself out of business. Profit means looking for ways to make more money. Profit makes everything go to keep the lights on, meet payroll, keep inventory, create sustainability for the company and support the community.
Jack gives the overview that you have to have a plan to make money on purpose. If you start doing things differently with no plan in place, the small business owner won’t know what to do. Pulling together the first draft of your Profit Plan begins with answering 2 questions:
- What do I want my company’s sales to be for the coming year?
- How much do I want in profit/net income/the bottom line?
If you start with putting these two stakes in the ground, you can then go about the business of filling in the details in between which consists of all your expenses. Our business coaching clients are often amazed at how quickly they can pull together their first Profit Plan. They almost get giddy when they present it to us. Dedicate your plan to figuring out how your company is going to make money on purpose not solely on how to squeeze your expenses even lower which is the budget mindset. Your Profit Plan can be very exciting in having an “Abundance Mindset” rather than being straightjacketed by the “B” word.
Jack and Adam also discuss the topic of how to bring on a new hire and having to add to the salary pool and additional payroll. Will this person, over time and in the future, be part of the profit structure in bringing in more sales, more business and more cash? Having a plan and a profit mindset will open up the opportunity to bring on the talent to have your business be profitable.
For more info on small business challenges tune into this week’s June 7 podcast on iTunes or http://maximumvp.com/dirty-secrets-small-business-radio-show-podcast/ or call Jack or Adam for help with your small business challenges at 877-849-0670.
If you have a success story or a question you would like to share, email or contact Jack and Adam directly at email@example.com or 877-849-0670.
You can also call in during the show each week when you are listening on Wednesdays at prime time 7:30pm (EST) on WINT 1330 AM and 101.5 FM. Or call 440-946-9468 to ask your question to the Maximum Value Partners’ coaches or tweet your question to @MaximumVP.