Why do you want to be profitable?

If you spend any time listening to people in the world of business coaching, you hear a lot of chatter about how to be profitable, more profitable, and WAY more profitable. But what’s the point of having a profitable business?

I’m a millennial, a business owner, and a mom. In my financial coaching practice, I talk with my peers about money goals.  When solopreneurs come to me for help with their business finances, the true goal is never to have a profitable business for its own sake. 

A profitable (aka money-making) business is simply the vehicle that allows you to reach your personal goals.

When I stopped to reflect on those conversations this week, I realized the same 5 money goals come up over and over again:

1. Paying off credit cards or other debt.
2. Avoiding nasty tax surprises.
3. Going on vacation (and actually enjoying it because you don’t feel like you overspent on the trip or tanked your business by being away).
4. Saving enough to send kids to college.
5. Retiring someday.

I wrote them in this order because to me it’s chronological: it starts with dealing with past decisions, moves into handling current decisions, and ends with planning for decisions in the near future and beyond.

Wrestling with more than one of these goals? 

You’ve probably found yourself stuck wondering: 

How do I figure out not just what to do… but how to do it… all at the same time!?!

The confusion around priorities makes perfect sense.

Each goal has a different time horizon, level of perceived importance, trade-offs to consider (what happens if I do it now, versus waiting until next month or next year?), pleasant or unpleasant emotions attached…and more.

I want to make it super easy to get clarity on priorities and next steps, so here’s the 3-step process I suggest.

Step 1: Go through the 5 items on the list above and ask yourself, “Is this a goal of mine?”

Step 2: For all of your yeses, assign a dollar value to achieve that goal. For example, how much debt do you have in dollars? How much does your dream trip cost? How much do you need to retire?

Notice that the numbers get harder to identify the farther you get down the list. This can trip people up, but guess what? 

The less certain you are about the numbers, the stronger the indication that you need help from a professional!

Step 3: Give yourself permission to not know the answers, and to reach out for help. Committing to your goals means taking the right actions to achieve them, which usually means asking someone who knows more than you do.

Ask your most well-connected friend who they know and trust that specializes in the area where you’re struggling to get traction. Be a little brave and reach out. Your future self will thank you!