Falling cash reserves—the silent killer of small businesses—means trouble with your business profit model.

If you keep dipping into your cash reserves, it likely indicates a problem with your business profit model.  Failure to profit from your weekly, monthly, and annual revenue stream robs you of building cash reserves and is a warning sign that you need help with your business model to make more money.  Failure to build adequate cash reserves to carry you through the unexpected is a business profit model crisis.

1.  Consequences of Business Model Failures

Business model failures often stem from failing to define your who, what, when, where, and why in the light of the 6 P’s of marketing as they relate to earning a profit.  Failing to know these guiding principles for your business will suck cash out of your savings and sink your business.

2.  Challenges of Maintaining Profitability

What makes owning a highly profitable business one of the most difficult challenges in the world is that you can solve each of the 5 W’s + H but still lose your business if you fail to convert your profits into predictable cash flow with bank reserves.

3.  Strategies for Startup Survival

If you’re a startup, you must move swiftly and do it without spending too much cash as you figure out your recipe for success, or you will be out of business before you’ve begun.  You can protect yourself from this by not hiring employees before you need them.  The more you can do yourself or hire independent contractors, the more you can protect cash until you earn profits.  Spending money on people who don’t earn you a profit is a costly mistake for every business.

4.  Strategies for Established Businesses

You must think and move quickly to remain profitable if you’re an established business.  The key to earning higher profits is always experimenting and refining. Think, “fail fast.”  Not everything you do will work out as planned.  If you are going to fail, it is best to fail fast to determine what needs to be defined further, refined, and fine-tuned to nail down your business profit model.

5.  Maximizing Sales and Profits

The key to maximizing your sales and profits lies in the learnings and insights you develop for your business as you unlock each of the seven organizing principles that will make your business a profitable business.  Every business is built on selling a product or service to people with a need you can serve or a want you can satisfy.  Your ability to solve your target customer’s problems better than your competitors is how you maximize sales and profits.

The bottom line for all business models is to shape your offer at a price that earns you a profit.  To increase your sales and profits, focus on understanding and applying the following seven organizing principles to help your business thrive:

1. 1. 1. Who you serve represents your target customer
      2. What problems you solve are your products and services
      3. When your customers need your help tells you their purchase trigger
      4. Where your customers will want you to help them identifies your place
      5. Why it should matter helps your employees deliver value, plus
      6. How you are better than your competitors are what results in a
      7. Profit to you.

These insights will unlock your business’s potential to become more profitable.  Every business is built on selling a product or service to people with a need you can serve or a want you can satisfy.

To increase sales and profits, focus on solving your customer’s problems better than your competitors.  A business model helps determine how you do this at a profit is what most small business owners fail to establish.

Connecting people with your products and services becomes more difficult when you’re unclear on any one of the seven organizing principles for doing great business, particularly when your revenues aren’t covering your costs.

6.  Personal Accountability Drives Your Business Model

You increase profit consistency by being 100% accountable for your decisions and actions.  If you fail to hold yourself accountable, any value you create for your customers will come about by chance.  The problem with things happening by chance is they are next to impossible to replicate.

7.  Consequences of Profit Principle Violation

If you don’t prioritize making a profit, your business will suffer.  Profits are vital for every business, and running a business without profits violates the most fundamental law of business.  Do this for too long, and your ability to deliver value will evaporate, and your business will die.

Are you ready to improve the performance of your business model to make more money?

If your profits are decreasing and you struggle to keep cash on hand, consider taking the free BusinessCPR™ Business Assessment. This assessment will help you determine the current profit stage of your business. Click here to take this no-obligation business assessment. Upon completing the business assessment test, you will receive a profit stage profile confirming which of the five profit stages your business is in and what you can do to change your profit stage.