Being Busy Doesn’t Make You Profitable

Every time I read about some business owner talking about the long hours they have to work, I remember a lesson I learned a few years ago: Just because you’re busy doesn’t mean you’re profitable. The worst is when they wear it like a badge of honor. Maybe I’m incredibly lazy deep down, but I’m always looking at ways to increase our efficiency so that we’re at least making the same amount of money, but doing less work.

As entrepreneurs, we all have times where work takes over and we have to grind things out. Maybe it is a big project or perhaps you’re expanding fast. But the important thing is that these have to be for just a season. You’ve got to recharge. And too often I’ve found that when I’m overwhelmingly busy, I’m not seeing a commensurate increase in my bank account.

Because of the way we deliver our services, I am usually my most profitable when we aren’t that busy. Sure, that doesn’t apply to every business, but it is freeing not having our profitability tied exclusively to hour many hours we work. And even if your company’s profit is tied to how many hours are worked, you may want to take a second look. Would raising your prices allow you to do 2/3 of the work with the same income?

How busy you are should never be your measure of success. It might be a good indicator of how well your company is doing, but it can’t be the only one. If I dropped my prices, I’d be much busier. But I’d be a whole lot less profitable.

The more I examine small businesses, we seem to run with the Wal-Mart mentality. Do a lot of volume with low prices. But rarely does that work out well for a small business long term. What if we shifted our mentality to be more similar to Apple, (you knew that was coming)? Higher profits with fewer clients. Providing an incredible level of service and charging accordingly.

If you’re working crazy hours and aren’t feeling the burnout, it will come. If you’re stuck working crazy hours consistently, it’s time to look at how you can restructure things. Being busy doesn’t make you profitable.