Planning for Profits involves creating a financial roadmap with clear targets to guide decision-making, enabling you to prioritize crucial actions to achieve the desired outcomes for your business.
Primary Implication
Each year, as part of your profit planning for the coming year, you need to ask yourself a hard question: “Do your planned gross profit and operating (EBITDA) earnings suggest that your business can be successful in the long-term?” If not, “What specifically needs to change during this profit planning cycle for your business to be successful?”
The next question is, “How am I going to influence these factors, so I’m making acceptable profits for the risk that I’m incurring?”
Overview
Anytime you fail to Plan for Profits, you fail to give yourself a line of sight to what is and isn’t essential, nor do you give yourself a guide to help you make the best decisions.
It’s impossible to see if you’re doing what you set out to do, let alone accomplish your goals when you fail to know what your monthly sales and profit targets are. Ideally, your plan for profits is finalized in month eleven of each year, so you’ll know your goals for month one of the upcoming year.
By mastering the ins and outs of your profit plan, you’ll be able to determine the critical few things to do among the noise of the relevant many you could do. This is how you consistently produce the desired results that you are holding yourself and others accountable for generating.
BusinessCPR™ Step 2—Plan for Your Profits is how you set the direction for your business. Here is where you define your targets to be realized by month and year for net sales, gross profit, operating income, and net income.
The “P” in B-CPR stands for Profits. The remedy to any of the above cardiac arrest risks lies in a twenty-four-month Profit Plan that sets clear targets and guides wise decision-making. This includes committing to the necessary actions to help you realize planned outcomes for your business.
