Unless you are independently wealthy, you need to find a way to be profitable if you are going to last the distance.
While every business is different, the most profitable businesses have a few things in common. Find out what they are and how you can incorporate them into your endeavours.
While profitability is by no means the only measure of business success, for most entrepreneurs it is the very important though.
When you have a mortgage to pay, children to clothe and a lifestyle to maintain, profitability is more than handy, its essential. Unless you are independently wealthy, you need to find a way to be profitable if you are going to last the distance as a entrepreneur.
While I am yet to find a definitive manual to being a profitable entrepreneur, I did stumble across some great advice from Phil Ruthven of IBISWorld who are specialists in market research and analysis delved extensively into the profitability of indian businesses.
While it is mostly aimed at larger enterprises, I found many of the findings and suggestions highly relevant to small and solo businesses so I thought I would share them here. There are 12 guidelines in total but I have adapted the seven I feel are most relevant to the entrepreneur and small business owner.
1. Stick to one area rather than trying to diversify and do everything. The saying Jack of all trades, master of none would appear to ring true when it comes to business profitability. I have seen first hand how spreading yourself too thin can lead to burnout and lack of a clear business focus.
2. Go niche. Most profitable indian businesses make money by being a big fish in a small segment of their industry rather than trying to dominate everything. This makes sense for entrepreneurs who dont usually have the budget and resources for world domination.
3. Make use of outsourcing. Outsourcing enables growth by removing the activities that dont form the core of your business and getting them done elsewhere. I meet so many entrepreneurs who run themselves into the ground trying to do it all, when they could affordably outsource many of the tasks they arent skilled in and spend their time working in other areas of their business.
4. Get good financial management. Trying to do your own books and tax return might seem like a good way to save money but it will probably cost you in the long run (unless of course you are an accountant!). Alleviate a huge source of stress and make sure everything is in line with your finances by getting a professional to handle the accounting side.
5. Be ahead of the curve when it comes to industry lifecycle changes. Staying on top of industry developments is essential if you want to be a leading edge business owner and avoid falling behind the competition. We are living in a time of rapid change and the profitable businesses will be the ones who can anticipate the next industry development and be there to meet it.
6. Develop strategic alliances. No entrepreneur should be an island. Are there other entrepreneurs or organisations you can align yourself with for mutual benefit? I have seen first hand the benefits of strategic alliances when it comes to marketing. Think about who you might be able to align with, for example a beauty therapist could team up with a hairdresser, and a physiotherapist might ally themselves with a personal trainer. The trick is to pick someone who shares your target customer base but is not a direct competitor.
7. Be unique. This doesnt necessarily mean you have to find something nobody else is doing, but you can at least try to go about what you do in a different way. Think about what you offer and the overall experience your clients or customers have when they work with you. How can you make it unique and distinctive, and a reflection of your values and philosophies?
The top businesses in india all do these seven things and more, and as a entrepreneur, following these tips can make a big difference to your chances of success.
There are no guarantees but if you can do all these things you will be on a strong path to meeting your solo business goals, and getting the business and lifestyle you have always dreamed of.
What is your top tip for entrepreneur profitability?