Memphis Go Getters –
Yesterday, I had a friend reach out to talk about his desire to have a business.
I told him, look, man, you already have a business.
He paused for a second and said no I don’t.
I said let me explain it this way.
A business provides a product or service in exchange for money (i.e Revenue). The revenue is used to cover the expenses of the business such as payroll, utilities, the cost of goods sold, insurance and much more.
At the end, the goal of the business is to have a profit for its owners.
Then, he said I know all that and I want a business that makes a profit.
At that point in time, I recall a rap verse from Jay-Z on the Diamonds from Sierra Leone (Remix)” (2005), he says
I’m not a businessman, I’m a business man.
Now, we may not have the money and fame like Jay-Z but everyone is a business.
Basically, if you work a job, you are providing a service for a fee (i.e your revenue) and your living expenses (rent, food, clothes etc..) are your cost.
Hopefully, at the end of the day, your business is making a profit.
From there, you must decide what are you going to do with your profit.
You can save it in the bank and get small returns, spend it on frivolous things that lose value or invest in yourself through education or a new business idea that will give you the highest return.
My friend laughed and said well
I guess I have a business but my profits are slim to none.
Profits over Wages
One of my favorite quotes from motivational speaker Jim Rohm is “Profits are better than wages. Wages will make you a living, profits can make you a fortune.”
Then, I told him there is only a few ways business increase their profit.
- Reduce their expenses
He laughed and said I’m still eating Ramen noodles
- Increase their Revenue
There is 3 ways business increase their revenue:
- Add more customers
- Have customers purchase more frequently
- Have customers spend more money per transaction with upsells
I told him you must personally figure out how to increase the value of what you bring to your job or to the marketplace.
As Jay-Z said I’m not a businessman, I’m a business man.
Today, I want to remind you that you are already running a business.
You are a business.
Some of your business are making a profit and some are not.
I encourage you to focus on those 3 ways to increase your revenue to increase your profit and as Jim Rohm says to make a fortune.
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