Guest Editorial

Running Your Business Profitably

Common sense does not go far enough in helping you run a successful business.

by Linda W. Lee, CPA

There is a certain common sense about being profitable in business. As a CPA, I automatically think about the costs of operating. Some examples include the costs of purchasing sample books, office supplies, car expenses, etc. For those of you with storefronts, operating expenses might include the above items plus salaries, commissions, rent, utilities, etc. As part of a profitability discussion, I also think about the value of my time and the expertise I bring to my customer. All of these factors lead to a calculation of how much I should charge so that my income exceeds my expenses. You probably share a similar understanding that in order to stay in business, your income must exceed your expenses. This is fundamental. My goal in this article is to be a significant help to you in running your business. As such, I do not want to just give you tips and techniques that have worked for me in my business. Tips and techniques have their places. However, I think you will find that most times, they are very situation-specific and are difficult, if not impossible, for you to apply to your specific situation. So, rather than settling for tips and techniques, I want to offer a new interpretation, some new thinking, about what is important in being profitable in running your business so that you can, without question, apply it to your business. WHAT'S YOUR STORY? The first thing we need to understand is what is a business? We usually think of a business as a place where we find sample books, calculators and computers, and where we might meet our customers. I am going to call these things tools. Tools are things or places you use to help you operate your business. However, if you lost all of these tools in a natural disaster, would your business cease to exist? It might be difficult to conduct business for a while, but in the end, I suspect you could replace these tools and continue on. In other words, your business would continue whether you had these or not. So, what then is a business? A business is a story of how someone, the founder, plans to help another person take care of what he or she cannot easily do himself or herself while balancing the solution with everything else the customer cares about. In the window coverings industry, this translates to how you plan to help your customer decorate her windows, something she can't easily do herself and do it in a way that takes care of what is important to her. "So what is important to my customer?" you ask. Well, what do you care about? Chances are what you care about is, in part, what your customer cares about also. You probably care about your family, your kids and your marriage. You also probably care about your body, its health and fitness, because it allows you to take care of other things you care about. Building trust with other people, concern for what other people think about you (both good and bad), your time and your ability to buy what you need and want also are things you probably care about. These are just a few, but it will get your thinking started. So then, your business is your story of how you plan to help your customer take care of her window coverings in a way that allows her to also take care of the other things in life that are important to her. Practically then, if your customer values his family time and you try to schedule an appointment to help him change what people think about his window coverings at a time he usually spends with his kids, he probably will not be willing to meet with you. Or, if your customer is deeply concerned with what other people think about him, you may find his plans exceed the stated budget. It also could mean you need to offer references to this potential customer to help establish trust in you, or it could mean being prompt to an appointment with a customer who you know values his time. Get an understanding of what is most important to your customer before trying to help. This will be the determining factor as to whether you close the sale or not. ENHANCE YOUR ABILITIES Next, we must understand what is meant by the term profitable. The American Heritage Dictionary defines profit as "an advantageous gain or return; benefit." So, the term profitable as we are using it would mean that you have the ability or capacity to derive an advantageous gain, return or benefit from the business story you work to fulfill. We normally think of this to mean money earned in a transaction. For some, we also think of this as meaning the reputation you build while working with your customer so that possibilities are opened for you to do more business in the future. We take our ability to derive a benefit for granted and do not think about it. Because customers continue to use our services and pay us, we continue on day by day as if nothing will change. Our common sense tells us our capacity is fixed and that it does not change. In reality, as we grow older our capacity to work will diminish. It is a fact of life. Someday our bodies will not work as well as they do presently. Do not despair; there are steps you can take to increase your capacity to fulfill your business story. This is where your competitive advantage lies. How? Through the education and training you put yourself through and the organizations you are a part of. Most people think of education, training and networking in organizations as good things to do without an understanding as to why. They view it as fun to be around people who share common problems or commiserate with horror stories. However, education, training and networking in organizations do much more. They open up for you new ways of thinking and possibilities for you to help your customer. By new thinking, I mean new ideas that you never would have had on your own. Talking with people is the single most critical element involved in increasing your capacity. So, while you thought a particular seminar or educational conference would be helpful, you probably did not understand that by being there you are increasing your capacity (beyond money and reputation) to be more profitable in your business. To put all this together, running your business profitably means working on your story of how you plan to help your customer take care of what is important to him or her in a way that is also beneficial to you, be it in the form of monetary compensation, increased reputation, new ways of thinking or in some other way that increases your ability to fulfill on your story. Linda W. Lee, Linda@yourblinds.com, is a CPA and a co-founder of YourBlinds.com, an online customer referral service company to the trade. YourBlinds.com is a WCAA 2001 Industry Partner.

More Guest Editorials   Running your business profitably means working on your story of how you plan to help your customer take care of what is important to him or her in a way that is also beneficial to you.   ACTION PLAN 1.Make a list of what is important to you. 2.When you talk to your customers, ask them what is important to them, listening for them to speak about some of the same things that are important to you. 3.When working with your customer, always, always, always keep in mind what you know to be important to them and work accordingly. 4.Get more involved with your local WCAA chapter, it's in your best interest. 5.Find out when other industry conferences are being held and make a point to attend and talk to people there, they can open up new ways of thinking for you.