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Most Of Your Business Won’t Make Money

Here’s the deal – a vast majority of what you, as an entrepreneur do, everyday, doesn’t directly make you money. Sitting down and recording your income and expenses – doesn’t directly make you money. Reading books and magazines for personal and professional growth – doesn’t directly make you money. Recording all of your internal processes so you can scale your business – doesn’t directly make you money.

There are two sides to this coin.

On one side, we must accept that to a certain extent, this is simply the way it is in every business. It’s why you pay very good sales people very good salaries – the income they create supports all non-cash-generating and necessary parts of the business.

On the other side it becomes a psychological issue when you begin looking at the value each part of your business generates, and also when you hire consultants.

I have a business consultant I speak with on a regular basis – Lauri Flaquer. She has created tremendous value for my business. Has she directly made a sale for me? No. Has her advice and assistance led me to landing a large amount of sales? Yes. If I was basing my decision to work with her on the revenue she directly generated for my business I wouldn’t be working with her, and I would also be losing out, big time.

Here’s another example of how one thing, or person, can indirectly make a lot of money for a business.

Google created the Android operating system that now runs a large number of today’s smart phones. Google doesn’t directly make money on Android – it’s open source, meaning “free” as in beer. However they make money on the mobile ads served on those devices through Google AdWords and apps sold through it’s app store.

Google doesn’t make money from Android; it makes money because of it.

I don’t make money from my business consultant; I make money because of her.

You don’t make money from non-sales activities in your business; you make money because of them.

Savvy?

Comments

  1. I think this relates to a lot more than just a business you run. It also has to do with anyone who works for you, who isn’t directly involved in sales. For example, when I was the admin. asst. for a youth organization (best.job.ever.!), it was brought to my attention that I was on the “expenditure” side of the equation. That’s a really tenuous place to be. So I made sure the company made money, or was more customer friendly, or more streamlined, so that the directors would keep in mind that, while I wasn’t specifically making money, I was helping THEM make money with what I brought to the table. LOL, I also brought my own stapler from home — I didn’t want to be more of a “cost” than necessary. It’s interesting to see this from the flip side. I was the equivalent of an app. *perspective*

    • Andi Roo very true Andi, thank you for adding that. Everyone inside a business serves a function, which ultimately leads to the business having an ability to earn money.

  2. bcoelho2000 says:

    Hi Robert!Loved your article, specially when you say -> You don’t make money from non-sales activities in your business; you make money because of them. That’s a great way to look at the investments we make (time, energy and money) so we can ‘make’ money later.Now, here’s an idea that I would love to share with you and hear your feedback on it.I don’t believe that in business we *make* money at all. Central banks actually make money because they print it. In business, we *earn* money through the valuable products and services we provide for others.The difference is simple but causes an important change in our mindset. When we believe that we *earn* money, what we’re really saying is that we’re here to serve not to be served. We understand that money is the applause we get by how well we serve our customers. By the way, the way we serve our customers is directly related to how well we serve our employees.Another important difference between the *make* vs *earn* money mindset, is that money by itself isn’t a worthwhile goal. On the other hand, making meaning IS a worthwhile goal that will potentially earn you money. However, what drives you isn’t the outcome by itself… it’s the journey! Something that will outlast you and that serves a purpose.Thank you for allowing me to share this idea with all of you and I look forward to learn more about your point of view about this!All the best,Bruno Coelho

    • bcoelho2000 you are very right Bruno, and very technical with the use of your words. We don’t literally make money, we do earn it. I really like how that shifts the perspective. Great stuff!

  3. Hi Robert,You speak a great truth here buddy! Learned from personal experience…and our lunch a while back…you need to work persistently to make money online. You also need to know that much of the money making will be the direct result of people making money for you.Team members making money…or a large network of people heavily promoting you…or meetings with your business consultant.Be open. See opportunities to prosper. Seize them immediately. Most will lead to something that can help you make money, but it’s more about building a relationship, receiving advice and proceeding to create value for others. The money making happens as you focus on building connections, being open to inspiration and creating good things for others.Thanks!RB

  4. lauri@successwithsaltar.com says:

    Robert,This is a very interesting post. Many people don’t understand how much time it takes to actually run a business. Usually the part one gets paid for is very small and everything else has to be done first. It’s very interests. Thanks so much for the kind words. I appreciate you shining a light on my services and how people can best understand the value I provide to my clients. Mostly I help clients make money in an indirect way. Frequently it’s in helping them avoid costly mistakes, which saves that lots of money, The right decisions can make or break a business, I help my clients make ones that grow their business.  You’re fabulous and I love working with you. Thanks again,

    • lauri@successwithsaltar.com when I started my first business 14 years ago, I had no idea of all the time it would take to actually run the business, on top of providing my services. Now I’m happy to be building a team so I don’t have to rely only on myself to get everything done.Things are a lot harder when you think you’re all by yourself, or you actually are.

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