Ron Collier's new book Profit Is an Attitude: The Strategies You Need to Optimize Profits is a tour de force statement that every business owner needs to hear-in short, if you want to be in business, you have to want to make a profit.
That may seem like common sense, but too often businesses fail because owners don't focus on increasing their profit or even tracking whether or not they are making one.
As Collier states, most businesses are stuck behind a growth wall and need to accept that they have to do the work to get over that wall. Without making a profit, rarely will a business continue, so Collier, himself a successful entrepreneur and business management and sales consultant, has written this book to demonstrate how to run a profitable business.
RELATED: One of the Most Important Things You Can Do for Entrepreneurial (and Life) Success
New Book Proves Profit Must Be Focus for Businesses to Succeed
Collier's experience and tell-it-like-it-is style are refreshing. Having read many business books myself, I appreciated how he got straight to the heart of his argument.
Collier begins by pointing out that the business owner wears three hats: owner, manager, and coworker, especially in the beginning.
Unfortunately, the business can't grow if the owner is too busy being the coworker or even the manager. A business succeeds when the owner finds others to be coworkers and managers for the business so the owner can focus on being the entrepreneur.
While business books usually highlight how to obtain customers and sales, Collier points out that most businesses do not fail from a lack of customers or sales but from poor management.
The owner must develop a “profit attitude” and go to work each day with the intention to make a profit if the business is to succeed. Unfortunately, many people lack a profit attitude or become too involved in the nitty-gritty of business operations to focus on the primary goal of making money.
Collier shares several stories of business owners he's known or worked with throughout the book, many of whom are misguided in this way. For example, one business owner bragged that he was so busy he hadn't had time to bill any of his customers for three months.
Such business owners, as Collier notes, often end up bankrupt. Instead, a business must be constantly focused on making a profit, and to do that, it must be well-organized.
From there, most of Profit Is an Attitude is about how to get organized, both financially and in relation to employees and customers. While many business books cover the topics Collier discusses, I found that the way he walked readers through understanding profit and loss statements and balance sheets was practical and easy-to-follow, and unique in that he continually brought the discussion back to what is necessary for a profit to be achieved.
A key point Collier makes is that only three ways exist for a business to increase profit: increase sales, cut costs, or raise prices. He discusses all of these options and how to determine which is best in which situation; he also provides mathematical examples for support; for instance, he demonstrates how a slight price increase will help profit grow more easily than increasing sales.
Ultimately, he argues that businesses should strive to some degree to do all three of these activities regularly.
Collier also discusses pricing, showing that increased sales and being busy do not always equate with making a profit. Instead, it depends on how you price your products or services.
In fact, he states, “If you're too busy, your price is too low.” He discusses how to determine what is a good price to charge, as well as telling us how not to set prices based on stories from business owners he's talked with.
One owner counted how many people lived in a house to determine what to charge for installing air conditioning-not a well-thought-out pricing plan.
Ultimately, Collier explains why flat-rate pricing, instead of charging hourly, is very often the best choice; it makes customers happiest because they know what to expect, and it usually makes companies more profitable.
Each chapter begins with an inspiring quote. One of my favorites, by Robert Kiyosaki, was “It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”
In addition, there's a glossary of terms, appendices that include sample balance and profit and loss statements, and several references to various tools you can find at Collier's websites to assist you in setting up or reorganizing your business to make it profitable.
Most of all, I appreciated Collier's main message that profit is an attitude. It's great to serve customers, but we can serve more customers, plus employees and ourselves when we focus on creating a profitable business that will support us, our loved ones, and those we do business with for the long term.
Profit Is an Attitude may be the missing link many businesses are searching for. It's a book to read slowly and carefully, read again, and then apply to achieve increased profit and success.
