Building a Profitable Small Business

Sep 4, 2024

How to Build a Highly Profitable Business - Session One: Introduction

Speaker

  • David, Senior Account Executive, Consortia Small Business Accountants

Audience

  • Individuals considering starting or who have started a small business.

Purpose of the Series

  • Present a proven model for building a highly profitable small business.
  • Save time, money, and reduce headaches for small business owners.

Series Outline (7 Sessions)

  1. Introduction (This Session)
  2. Management
    • Increase financial condition, profit, cash flow, and equity.
  3. Research and Development
    • Develop highly profitable services and products.
  4. Marketing and Sales
    • Consistently generate customers/clients.
  5. Production
    • Efficiently provide services or products.
  6. Finance
    • Generate cash and increase cash flow.
  7. Customer Service
    • Retain customers, increase revenue, and referrals.

What is a Small Business?

  • A vehicle to achieve personal and professional goals.
  • Benefits four key segments:
    1. Owners
    2. Employees
    3. Customers
    4. Community

Types of Small Businesses

  1. Freelancer
    • Independent contractor, earns per job/task.
    • Pays self-employment and income tax.
  2. Sole Proprietor
    • Owns an unincorporated business alone.
  3. Limited Liability Company (LLC)
    • Protects owners from personal liability.

Financial Business Objectives

  1. Monitor financial condition (balance sheet).
  2. Profitability (income statement/profit & loss).
  3. Cash flow (statement of cash flows).
  4. Owner's equity (statement of changes in equity).

Business System and Processes

  • A small business should be seen as a system with interconnected processes.

Six Core Business Objectives and Processes

  1. Competitive Edge
    • Gain a competitive advantage.
  2. Profitability
    • Increase profits.
  3. Customer Acquisition
    • Consistently obtain new customers.
  4. Productivity
    • Efficiently produce and deliver services/products.
  5. Cash Flow
    • Increase cash flow.
  6. Customer Retention
    • Retain customers and increase referrals.

Achieving Business Success

  • Continuous cycle of R&D, marketing, sales, production, finance, and customer service.
  • Management’s role is to ensure synergy among all processes.

Small Business Challenges

  • Common issues include lack of competitive edge, profitability, customer base, productivity, cash flow, and customer retention.
  • SBA reports 80% failure rate within the first 5 years due to inadequate implementation of core processes.

Getting Work Done

  • Options for Business Owners:

    1. Do it themselves.
    2. Hire employees.
    3. Outsource to contractors.
  • Focus on tasks only you can do exceptionally well.

Conclusion

  • Aim to implement a complete business structure for success.
  • The series will provide detailed strategies for each business aspect in subsequent sessions.

  • Next Session: Management - Increasing Financial Condition, Profit, Cash Flow, and Equity.
  • Goal: Build a highly profitable business model in the next few years.

  • End Note: Stay focused, and attend subsequent sessions for detailed insights on each business aspect.
  • Thanks and Goodbye!