Profit. This is the space of more, of extra, of what is left after all expenses.
There are three types of profit that will show up on an income statement:
- Gross profit
- Operating profit
- Net profit
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Tax season is the one time of year that all businesses become publicly aware of their profitability. Of course, this information should be known throughout the life of the business, but for the solo-entrepreneur or the small business owner who is still wearing a lot of hats, doing the accounting, keeping it up to date, analysing the data, and using that analysis to adjust their operation may happen less frequently that they know it should happen.
One of the goals during tax season is also to bring the declared profit line down with every write-off that is possible, so as to justify paying less in taxes. Bear in mind, your public tax record is also what banks and other growth impacting organizations look at, so if you constantly appear to be unprofitable, and even the IRS will declare your business to be a hobby, and you may lose some of your business write-off privileges eventually.
Profitability is the goal of all business; even the not-for-profits want to generate more than they use up so that that extra can be donated or reapportioned so that they end with a zero profit line, but profit is still their goal, but how they handle that profit is special for not-for-profits.
Today, I want to impress on you to move toward profitability with urgency because it is Biblical to be profitable, and for the Christian income earner – the Bible has a lot to say about profitability and we should pay attention.
It is time to pay attention to your harvest. Let us look at what the Bible has to say for some Biblical insight into generating and building profitability. I mention many of these in my book
The first thing I want you to note that there IS a Biblical Profit Mandate. Read more about that here but in a nutshell, God delivered a stern judgment on the servant who buried the talent without at least investing it with the bank for interest. (Matthew 25:26-30)
Whatever has been entrusted to you, God expects you to move it to profitability. However, we will not all have the same profit results. Some will find their work effort (sowing seeds) returns 30, 60 or 100 times the investment.
Matthew 13:8 “Still other seeds fell on fertile soil, and they produced a crop that was thirty, sixty, and even a hundred times as much as had been planted!”
The amount returned is not equal. God’s favor is NOT on the socialistic agenda of equality. Some do get more than others. However, that does not make any to be less valuable than the other.
Biblically speaking, there is equality in value, but there is no equality in exposure, purpose, or profit. Some of us will be more publicly exposed and some of us will work quietly behind the scenes. Some will receive more recognition and praise, some may never be thanked. All are still valuable and their contribution to the purpose of God.
1 Corinthians 12: 18, 22 “But as it is, God arranged each of the parts in the body exactly as he wanted them, [ ] On the contrary, the parts of the body that seem to be less important turn out to be all the more necessary”.
Understanding that all profit is income but not all income is profit is the foundation of creating profit. PROFIT IS THE REALM OF MORE, OF ABUNDANCE, OF EXTRA. Too many solo entrepreneurs and small businesses are spending from their inflow without realizing how they are burning the future growth of their business. It is time to be Profitable and to INCREASE in Profitability.
A young man I was teaching was in the middle of his self-pity party. He lamented that his lawn-care business brought in a lot of money, but it did not seem to be enough. He lost the business because he never seemed to have money to purchase gas for the mowers or to pay his helpers.
As I dived into his operation, what became blatantly clear is, this man had zero understanding of operating costs and profit calculation. When his clients paid him, he put that money in his wallet and began to cover his life costs. Grocery, rent and so on. Looking into these life costs, there was one recurring expense that showed up – entertainment! His new income level he felt afforded him some extra toys that got him the attention of a girl he felt was out of his class, and he spent and spent and spent to impress her.
It was a shock to him to hear me tell him that he is the reason his very profitable business failed.
His business was profitable because his operating cost to income and his profit margin all indicated on paper that he was indeed profitable. The problem was – because he had not taken the time to document his expenses properly, and do his calculation, he was not aware of how much of the inflow of moeny he could extract from the company comfortably, without dipping into the funds he had to retain for operating and growth expenses.
In his case, this was simply mindless stupidity. For some, it is simply poor time management, or not delegating the accounting to an assistant or a service.
Today, the small business owner has tools to make accounting on the go easier. The first of which is Quickbooks, or even TaxBot. However, this post is not to go over tools of the trade, nor even line items for calculating profitability.
I urge you, sisters and brothers, to become profitable Christians.
There are too many Christians in line for a hand UP instead of being able to give a handOUT. This must change and I am honored to partner with God in this venture. I move Christian income earners to become profitable stewards of what God has put under your control.
This is your mission and if you agree to accept it, I am here to assist you accomplish it connect with me.