Four Steps to Achieving Profit Clarity

Four Steps to Achieving Profit Clarity

Marie Forleo, a bestselling author and coach, gave me a task to help me understand “profit clarity” during a summer business program. Profit clarity is essential for any entrepreneur looking to be successful in business.

I am a money coach, artist, and financial consultant. It is easy to understand profit clarity and how to actually crunch the numbers to make a profit, rather than ruminating over all of the possible scenarios. Profit clarity can be confusing for many creative entrepreneurs, who may not necessarily be financially savvy.

Marie’s words were so inspiring. Profit clarity is essential knowledge if you want more money and to stop wasting time on unprofitable income streams. To realize your full potential in business, you must design the best business model.

These are the four steps that I believe will help you get there:

Step 1: Vision

My business model has changed a few times over the past eight months. But, I find that the more I focus on profit clarity, my vision for my business becomes clearer.

To make the most profit from your business, your business model must be based on your strengths and weaknesses. I am currently in coaching and art and have over 15 years of experience in accounting and financial management. It makes perfect sense to me to help creative entrepreneurs manage their finances.

It is a fact that without a clear understanding of your business model, you will have difficulty achieving your goals. I recommend that you sit down and list all your strengths and talents and then create your business model around them. Talking to family and friends about your ideas is a great way to gain a better understanding of your unique talents. These ideas will need to be tested – often a lot.

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Step 2: Creation

Once you have a better understanding of your business model, it is time to write it down. Now comes the fun part! You can design programs you love and offer to your clients. Remember that you are building your business around your strengths and abilities to maximize your profit potential.

Step 3: Calculate the numbers

This is where some people find it difficult. It might take some assistance, but you are sure to be able to do it! To record all numbers, I recommend Microsoft Excel.

Not only do you need to know the price of each program, but also your overhead expenses and cost of goods.

This “clarity of profits” is important so you can determine, for example, whether you are charging enough for your products and services, which products and programs you should sell more to make the most profit, and what marketing costs you need to reduce. This profit clarity can be used to strategize your marketing plan.

Step 4: Reality and fine-tuning

Now that you have completed your marketing plan and business model, it’s time to test them. Your profits will tell you quickly if your business model works. If your profits are not showing the results you want, return to Step 1 to fine-tune again.

We all desire to be creative entrepreneurs. But, to be able to help more people and realize our dreams, we must ensure that our finances are in good shape!