Profit Made Simple Pt. 3

Every entrepreneur knows their business should be profitable. Obvious, right? But how profitable? If you aren't caught up yet, check out the first two parts. Because whether you make 50k or $50 million in your business, this is how you consistently and predictably maintain profitability in your business. Month over month, we've determined our profit and we've determined our expense categories. Now we just need to pick our ratios and fill in our sheet. This part's pretty simple. You just need to pick a percentage for each of your categories. And to pick this percentage, there's nothing really fancy or magical. I simply want you to ask yourself, in an ideal world, what percentage of my expenses would go into this category? Now listen, this means that you're listing the goal, not just reality. Just worry about what the ideal is, not what's real. Right now we're going to talk about how to get from where you are to where you should be in a second. And don't worry about perfection as you do this. This is a gut check, so let's go by just what feels right. When you're finished, double check that all of your percentages, including your profit margin, add up to 100. That's a biggie. Go back and adjust if you need to. And when you have those. This next part is probably the most important piece of the whole process. And it's very simple, but you need to pay attention. Use your average monthly revenue to determine what your target SPE spend in each category should be each and every month. You now have the key element for expense ratios. You have your expenses and you have your ratios. And by the way, again, I put all of this in a template that you can fill out for yourself. Just drop the word ratio in the comments and we'll send the template right over to you. Since we have our numbers, I'll tell you how to get everything to a place of profitability in the final part of this series, so make sure you follow.