What does it really mean to be profitable?

With my newly-minted certification as a Profit First Professional coach (huzzah!), I've spent more than a few hours thinking about this question.

Profit First is a concept (and now a book) penned by business author (and my friend) Mike Michalowicz. The book drives home the point that most business owners make profitability an event (or worse, an afterthought), rather than a habit. Mike says "Shouldn't your profit come first?"

Um. Yes.

In fact, even a "for-purpose organization" (a term my friend Doug uses for non-profits) needs to generate positive cash flow in order to be sustainable.

Yet, so often, people bent on making a positive difference in the world think that focusing on profits is "icky".

*breathe*

There's a good reason for the ick. It stems from a very dismpowering definition of the word "profit". Let me explain...

Profit 1.0

Here's how we typically define "profit" today - courtesy of our friends at Google. The idea of "more" for the sake of more can leave heart-centered entrepreneurs feeling icky. We're not trying to get "more" all the time - especially not at the expense of people. Neither are trying to take advantage of others - or be taken advantage of ourselves! Yet the top two definitions of the word "profit" relate specifically to those two concepts:

For most of us, the word "profit" is synonymous with the word "money". They think about "rakin' in the dolla bills" and then rolling around in a pile of money like Scrooge McDuck. It's the "bottom line" of the balance sheet. It's the account balance, the number that's left at the end of the month when all the bills are paid - and before the next bill comes due.

Evil empires have hoarded it, conquered for it, and some companies have been built to focus on it (and only it) relentlessly.

No wonder we get all icky inside just thinking about it. After all, we're here to make a difference, to make a positive impact on the world. We want to make people happy, bring them joy, ease their pain, and we put the welfare of people ahead of money money.

We want to do good things, and all that ick, can't be good, can it?

We get mixed messages: loving money is the root of all evil, yet it makes the world go 'round.

Ah money, why do you vex us so?

What if profit had a wider, more holistic definition? Or is that too much of a stretch for you?

(more…)

By Doug Knight

[Editor's Note: This is Day 13 of the Be Your Own Guru series. Today, we roll into more of the "brass tacks" of building a Noble Empire. I met Doug at a local TEDx event, and was blown away not only by his passion for non-profit work, but also his ecclectic music tastes. Over the past year, I've come to learn how dad-gummed smart he is. If you're looking to dive into a new venture, this could be the kick start (or the warning flag) you've been looking for.]

A friend of mine asked me the other day, “How do you…you know… start something?” My friend was having trouble articulating what truly he was trying to get me to talk about, but after a round of drinks it came out a little easier to understand.

“I’m just afraid to drop everything, risk failure, and start off cold and at the bottom. But I know I would love to be my own boss.”

Ah…. got it.  The old “High Risk, Tough-to-see-but-know-its-there Reward” thang.

It’s one of those weird things, especially now with our economic situation as a country (broke), as a typical American (in debt), and as a community (“get a real job” talkers). But I think the first thing I would say to someone who is even just considering such a move is to first ask yourself…. “Are you Happy?”

Being happy also doesn’t mean always in the positive column. You must also know (it is guaranteed) (more…)