12. Finding Your Personal Profit Purpose

Profit isn't just the way your business survives and thrives. It's you you build personal wealth and achieve financial freedom.  It's how you invest and grow your business. Profit is how you have an impact. 

Profit = Impact

And profit is personal. Your purpose for your profit is personal to you. Knowing your personal profit keeps you grounded and centered in your business. 

In this week's episode, I'm talking about the importance of knowing your own personal purposes for profit. Have a listen and you'll learn:

• the meaning behind the name of this podcast
• the two real purposes behind profit in a small business
• how to find your personal profit purpos

Mentioned in this episode:

• Book your free financial assessment
• Get my free cash flow guide and learn 10 ways you can improve your cash flow

For the full show notes, including the  transcript, go to www.carlamoats.com/podcast/episode12





This episode was produced by The Podcast Teacher.

DISCLAIMER: The information in this podcast is for informational purposes only and does not constitute an accountant-client relationship. While we use reasonable efforts to furnish accurate and up-to-date information, we assume no liability or responsibility for any errors, omissions or regulatory updates.

Transcript

Hello there. Welcome back to Purposeful Profit podcast. I'm your host, Carla, and I'm just a little bit obsessed with helping female business owners get their finances in order, understand their numbers, and make more money. And if you've listened to me before, you know, I can get up on a soapbox on profit. And, hey, if you are new here, I'm going to forewarn you a little bit…because we're gonna talk again about profit today. What we're gonna talk about specifically today is about how profit is how we have an impact. I'm gonna talk a little bit about how this podcast got its name, Purposeful Profit, and we're gonna talk about why finding your own personal profit purpose is so important. 

But before we start, I want to say welcome. I wanna say welcome back. Welcome to the new people. Whether you're new or joining us again, I really wanna thank you for being here. it's been great to get feedback and emails from listeners. And especially if you've left your review for me over on Apple Podcasts, I really wanna thank you. The social proof is really nice to have. Occasionally, I'm gonna highlight a review. Today, I'm gonna do that. Today's review comes from Molly Watts. And she says, “if you want some straight talking, common sense ideas on how to grow a profitable business, this will be it. Carla offers the perspective from corporate and entrepreneurial life. So valuable.” Thank you so much Molly for that review. And like I said, reviews are social proof. So if you find value in today's episode, I would really love it if you go out and leave me a review on Apple Podcasts, and maybe you will find it featured from here on a future episode.

But first, let's go ahead now and dive in, and let's talk about what does ‘Purposeful Profit’ mean? I didn't just come up with that name on a whim. and you really thought, you know, this is my baby. How do I wanna name it? And the definition of purposeful, I went out and Googled it. Having or showing determination or resolve, meaningful, intentional. And you'll know I love that word intentional because in prior podcasts, and you'll hear it quite a bit, is one of the biggest things you can do in your business to make more money is to be intentional. Intentional about profit, intentional about how you spend your expenses, intentional about your strategy. So I love that word intentional.

And let's get real. Being a business owner isn't easy. This is something I have definitely learned in my own personal business owner journey. You probably know I've spent over 30 years in corporate. I had this steady 9 to 5, the job, the paycheck that comes in, and being a business owner isn't easy. It's got lots of ups and downs. It's got a lot of hard days. Days you don't really wanna show up.

I think it takes great determination and persistence to build a successful business and especially a profitable successful business. There are days you wanna quit. or days you at least question, whether it's really all worth it. And the thing is all my clients are all privately held businesses. Their business is kind of their baby. They’re mission or purpose-driven, they’re passionate, often multi-passionate, and their business was also created to help them realize financial freedom. 

So purposeful profit means you have a purpose for being a business for not taking that 9 to 5 job. You got some goals and dreams. And you are determined and resolved. You got some grit. You're gonna make it happen, but you also wanna make money. This isn't a hobby. You want that dream of financial freedom, but you also wanna do more than that. And what I want you to know is that your profits purpose really is to let you realize all those dreams. The dreams you have for your life, for your family, for your business, maybe even for your community. 

I really think that profit really has two big high-level purposes. One is your business impact. I want you to spend some time thinking, what are the dreams for your business? It got where we're at now, and off to one of our businesses, we get so deep in the weeds. on a daily basis that we don't have a chance to really step back. What's your dream for your business? Where do you wanna be in a year? 3 years, 5 years, or even 10 years? Let's go back and remember profit is revenue, minus expenses, it's what's leftover. Funds your operations. 

In a prior episode, one of the things we talked about was cash flow. And one of the components of cash flow is your net profit. So it funds your operations. It funds investments in your business: buy that new piece of equipment, you wanna invest in some personal development, you wanna hire employees. It funds investments in your business. It instills confidence in your lenders or potential sellers or partners that you're gonna sustain yourself. So whether you're getting a bank loan, or maybe you're trying to do a collaboration with a partner. You want them to have confidence in your business. The profit does that. 

It funds additions to your team. It's one of your investments you know, that a lot of business owners wanna make as they wanna grow their team. It provides a cushion for business downturns. I think this has really been brought to our attention with the pandemic, those businesses that went into the pandemic with a cushion in their business for a downturn, weathered it much better than those who weren’t making a profit or who weren’t making much of a profit or haven't been able to build any type of cushion. 

 So one of the things I wanna talk about is what we do with our profit because what I do with my clients because they're all privately held is we're gonna have our profit. We're gonna leave part of that profit in the business, and we're usually gonna take then part of that profit as a profit distribution, which I'll talk about in a minute.  Let's just take a typical scenario. If I make a $1,000,000 in revenue. And let's just say that my expenses are 500,000, so I'm left with a profit of 500,000. I have a 50% profit margin. I'm going to take part of that profit, and I'm gonna leave it in the business, and I'm gonna take part of it as a profit distribution to myself. And the actual ratio of how much I leave and how much I take, that's gonna vary by person based on their goals, okay? But let's just say you undertake a profit improvement and you add an extra $10,000 in profit. Or maybe you get an extra 50,000 in profit, an extra 100 k. A lot of that will depend on where's your profit currently. What would you do with that? What kind of impact would it have on your business? 

Let's just say you're a $1,000,000 business, and right now your profit is at a $100,000. And you'd undertake a profit improvement plan and it becomes $150,000. You take that extra 50,000. Okay. And part of it's gonna stay in your business, part of it's gonna go to use it distribution. Let's just say you take half of that extra. So you got extra $25,000 in your business this year. What would that do for you? Let's just say your profit goes from a $100,000 to $200,000. So you got an extra $100,000. Let’s just say take half of it and leave it in the business. What's an extra $50,000 gonna do in your business? What kind of impact can it have on your business? How can I help you achieve those goals and dreams you have for your business? 

And the second profit purpose you have is personal. And personal's pretty much everything that's not in your business. It's, you know, think about the impact on you personally. your family, could be your extended family, your kids, could be your community, causes you care about. Because what we don't leave in the business, we're gonna take out and get ourselves profit distribution. That's our management bonus. You hear about all these big CEO bonuses that they get. This is your personal bonus that you're getting for managing your business so that you have a profit. 

And, again, the ratio of how we'll figure out what you leave in your business and what you pull out of your business It's really gonna vary. Sometimes, you know, you're really focused on some business growth plans. You might leave more in the business. Maybe you have some debt that you wanna pay off. And so maybe you'll take a little less out in personal, and you'll use it to pay down your debt. But just like you thought about your business vision, your personal vision? What kind of life do you wanna have? Wanna be able to take off a month every summer? I'm in a mastermind, and there's a member in our mastermind, and she's actually lives in Paris. And she just took off ago, 3 or 4 weeks, which I know is very customary in Paris. Here are the states that is not customary for us to take off a whole month in the middle of the summer. It's very customary in Europe to take, like, 3 or 4 weeks off, but maybe that's the life you wanna have. 

Do you wanna only be able to work 3 days a week? You know, maybe you have kids and during the summer, you want a much more compressed work schedule. Do you have a spouse you wanna retire? This is something I hear a lot times from women business owners, they wanna retire their spouse. Do you have a special needs child you wanna insure is provided for? You wanna buy that vacation place. You wanna invest in rental property. 

You wanna pay for your kid's college education. That's one of my personal profit purposes right now. My daughter, we're recording this in middle of August. She starts her senior year of high school in a few weeks, and we're looking at colleges. And it is not cheap. Let me tell you, folks. It's not like it was when I went to college. part of my profit purpose is to be able to help her get out of school without having, a lot of college debt.

Do you wanna hand your business down to your kids, maybe? The bottom line here is that your profit that you have in your business. It's part of what funds your life dreams and your personal financial freedom. Do you have causes you wanna support? I have a client right now, and one of the things she wants to be able to do is provide support to her church and some causes that are important to her. And, again, what would you do with an extra 10k, 50k, 100k? 

And let’s take those examples earlier, we're splitting that revenue, that profit rather, between business and personal. What would you do with an extra 10k, extra 25k and extra 50k? How could this impact your life and your family and your financial legacy? 

Especially for those of you who are personal brands, Some of you will have businesses that you could turn around and sell that your face isn't necessarily the brand, but there are others of you that are maybe solopreneurs your coaches, you are the face of your brand. And you have less ability to sell because you are the brand. And your profit in that case, especially it builds your legacy. You're taking that money out of your business. You're leaving some of it in your business, and you're taking that profit distribution. And you're using that profit to build your financial legacy, invest in rental properties, start another business. Maybe Airbnb. Those are really popular You know, sometimes people will take money and they'll invest in Airbnbs, investing in stocks, whatever it is. Your profit is how you build generational wealth. So we talk about financial freedom, merely what is financial freedom. For a lot of us, it's the ability to unite to create generational wealth that our families have never had. 

How do you find your personal profit purpose? This is really your homework coming out of this podcast. I'm gonna assign some homework out of this one. Really think about it. What's the impact you wanna have? 5 years from now, what's the impact that you've had on your business? What are people saying about your business and what it does in the community? Have you provided jobs in the community, especially if you're a business that's locally based and not so much an online business? Is your legacy that you've provided jobs in your community? What's the legacy business-wise and personal-wise that you wanna have? 

I want you to go and list at least 20. Just brainstorm them. I actually like to keep on my phone, you know, notes. I have an iPhone, and I go into the notes app. just keep a running list when I think of, you know, what do I wanna be able to do? What are some of the goals I have in my business? What are some of the personal things that I wanna be able to do? Just keep a running list and add to it, but start with at least 20. And you could also do something that's called the 5 whys. It's used in root cause analysis. Okay. Where you take one of those reasons and you say, why do I wanna do that? You ask why five times to get to the root cause.

So for example, why do you wanna make more profit? I wanna retire my husband. The second why? Why do you wanna retire your husband? Because he travels a lot for his job, and we never have much time together. Why do you wanna have more time together? Because it wants to have a stronger relationship. You can keep going on like that. It basically gets to the deeper reason that you wanna have something. So come up with an initial list of 20 and then take several of those and go through the 5 why analysis and then add those lower-level reasons onto your list. And keep this list handy. Write down every day. Write down: “I wanna make more profit because…” with your reason. 

Wrapping it up today. Keep in mind, profit is personal. I say that quite a bit. You know, there's a few things you'll repeatedly hear me say. I say profit is a decision. I also say profit is personal because what drives you isn't the same thing as drives another person again, because you're not in a publicly held company. Right? you know, everything is in your business is really personal. 

Don't judge your why. I'd say other thing people say, you know, it's not a good enough reason. It’s your reason. And different purposes can serve you at different times and stages. Your purpose today may not be your purpose in a year. I know a business center whose original why was to be able to afford private school for her autistic son, and he's now graduated from high school. And now her why, one of her whys, is she wants to buy a condo in Vegas at her favorite hotel.

Your profit purpose of what helps you stay focused on the down days, and so the days when you don't wanna show up, the days when you wonder if it's truly worth it. and synergy when you're weighing investments or costs in your business. 

I am a fractional CFO, finance expert, but a lot of what I do is really help owners create the impact on their business and the lives they want. When I'm working with my CFO clients, we wanna set goals. We wanna get really clear on what's important to them. and part of that is finding their own profit purpose. If you are ready for some help, you can go to www.carlamoats.com/workwithme and book your free financial health assessment. And I will see you next time.