TSH 31: You might need to change - now. Here's why

profit strategy Mar 05, 2024

Reading time 2 minutes

We all start our business dreaming about how they’re going to change our lives.

A bigger house. A nicer car. Better school for the kids. Dream holidays. Working less.

How long will you give yourself to create your ideal business?

I want to ask you - how many years will you give yourself to create your ideal business - the business that allows you to live your ideal life.

I’m going to say 3 years. It’s not too far to be the distant future, but it’s also not too close that it’s unrealistic.

Most of us didn’t start businesses just to create jobs for ourselves - we probably had some pretty damn amazing dreams. The reality is, that many of you are running million dollar companies, and aren’t even paying yourself what you could earn in a job.

I know, because it was me too. It’s also hundreds of other business owners just like you.

So unless you’re on the path to having your dream business in less than three years, there’s a fair chance that you need to change, quickly, because without change, nothing changes. Deep huh?

My 3 Year Future Model

Take a look at my poorly drawn diagram below. This is my 3 Year Future Model. The top box is your ideal business in 3 years. The next box is your OK business in 3 years, the second from bottom is a bad business result in 3 years, and the last box is a critical business in 3 years.

The cash gap analysis

I want you to ask yourself 3 questions in relation to the diagram. For each of the boxes (ideal, ok, bad, critical), ask yourself this:

Per month:

How much would I be paying myself
How much would I be making it profit
How much would I have in my bank account

For example your ideal business answer might be:

$100k per month pay
$500k per month profit
$1m cash in your bank account

For your business to be OK, what would your answers be?

Same question for bad and same question for critical.

So, let’s say your criteria for ‘Bad’ was.

$5k pay per month

$10k profit

$20k in the bank account

Current state

Now, I want to ask you the same questions but for last month that has just gone by.
So last month what did you pay yourself, what was your net profit, and what was in your bank account.

I then want you to identify which line you are on the chart.

For example, if last month you paid yourself $10k, had $50k in the bank, and made a profit of $10k, then what box does that match most closely in 3 years? Ideal, OK, Bad or Critical.

This is the line you are currently on.

Your trajectory

If you’re not on that top line, your goal is to get there as fast as you can - within your 3 year period.

If there’s no gap and you’re on the top line - congratulations, close your laptop, go and buy your beach house, you’ve made it. Mark yourself Green on my little traffic light.

If you’re on the second line, you’ve got a good business, but you need to make changes to make it your ideal business. You’re orange on the traffic light.

If you’re on the Bad line, you have a larger gap to fill and you need to get moving. The closer you get to that 3 year mark, you'll notice in the diagram that the gap widens. You’re red on the traffic light.

If you’re at a critical level you need to change and change now. You’re also red on the traffic light.

The gap is closest now

There’s one thing that stands out on this chart. The gap between the 4 lines is small now, and big as you head towards year 3. That means that changing now is easier than changing later, and means you have more time to climb to the ideal line.

You see, time matters. If you change now, there’s a good chance you can be on track to achieve your numbers in 3 years. If you wait another year, and your results don’t change, or get worse, the gap widens between your current results, and what you need to be doing, within the time period you chose. In this case 3 years.

Let me explain.

You know the definition of madness right? Doing the same thing over and over and expecting a different outcome.

So it’s time to change, and you have time t o change if you act now.

The best time to change was yesterday - the next best time is today.

So how do you know what to work on next?

Well you work out your next right thing for the next 6 weeks, and you start working on it. Simple.

If you’re not sure where to start, go back and read about my 4 Pillars of Ecommerce Profitability here.

So that’s how you diagnose whether you’re on track for your ideal business. If you’re not, you’ll need to prescribe some changes, and if you need help doing that, reply to this email.

Until next week,

Paul

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