Make a Profit, Leave a Profit

If you’re in business, you know about making a profit (hopefully).   But, do you know about leaving a profit?

The cool thing about being an impactmaker is that we know how to do both.  Or, at least we want to.

I worked in a sales role for 12 years.  It was invigorating, frustrating, and  rewarding all at the same time.   There was constant change in the industry, within my company, and in my life as whole.  It was very important that my team and I learned to deal with the rollercoaster that is business.

The Cost of Doing Business

I found that is was extremely important to keep a handle on the average acquisition cost per customer.  It helped us understand what to expect in profits.  In it’s simplest form, our formula looked like this:

Annual Marketing Spend/Number of New Customers Per Year = Average Acquisition Cost (AAC) Per Customer

Yearly numbers made up our primary goals.  We could break them down per month and quarter as needed.  We could also quickly evaluate the success of an event or isolated marketing initiative.  For example:

$5,000 event / $2,500 AAC = 2 New Customers

If we didn’t acquire two customers it was a failure (at least from a profit and loss perspective).  Two was a success.  Three or more was a great event.

E-Impact is certainly not a technical blog but it is helpful to break down the metrics of a scenario for illustration purposes.  

Making Money

When we figured out how to measure our efforts, it was a lot easier to make decisions on what was a good investment - and therein lies the rub!  Not going to lie, I have always wanted to say that.  It’s perfect fit though.  In order to make a profit, you have to invest.  Otherwise, you’ve won the lotto or have a windfall.

I must stress that whether in business or the impact space, you have to invest in your efforts for them to grow.  In many cases it’s financially.  But, it could also be with time or other things.

Time, talents, and treasures are all investible in business and to make a positive impact.  The aforementioned rub is the foundational premise of a good process; decision making.  

Decision Fatigue

Simplifying your decision making process in business is very important.  I talk about the concept of decisions fatigue in my book, “Personal Finance in a Public World”.  While that connect is more related to personal decisions, fatigue is still present in business and perhaps at greater levels.  

Avoiding decision fatigue is a must.  You don’t want to be stressed about the most important part of your business (or personal life for that matter).  Find ways to automate or predetermine choices.  This comes with experience but can start immediately.

Here’s another example from my previous business life:

Most of the people on our team would be frequently confronted with marketing opportunities for our business.  Everyone thinks they can sell your product or service better than you.  It raises the question, “Why don’t these people just switch industries if they can sell something so well?”  

If any of the solicitations claimed to provide a AAC less than 50% of what we experienced it was immediately turned down.  We would explain that we don’t believe those expectations are reasonable after a combined thirty years of industry experience.

It took some time to get to this point but it was vital in eliminating lots of brain power drain and lost time.  Another concept in my book is that time is money (although the conclusion provides an interesting twist on this, great tease, huh?).  Adding the 50% AAC rule to marketing decisions was one of the most effective tools we used for our productivity.

Making a Difference

This is not a business training course but the parallels between business and positive world impact cross in two things: desire and strategy.

I believe that desire is what drives your intensity and strategy is what drives your effectiveness in either space.

One primary premise that I live by is “a positive difference can be made”.  This is an interesting thought to consider on a daily basis.  In one way, it’s a very empowering thing.  On the other hand, it’s saying that we have work to do.  As impactmakers, we are positive people acknowledging that the negative exists.  Bad things (sin) are in the world.  The good news is that we are blessed with the ability to make things better.  

One important effort in business and impact is education.  I don’t consider myself the foremost authority on doing good in the world but reading this blog is a form of education and effort.  It shows that you have the desire (or at least some of it).  Just by reading you are effectively an impactmaker.  

But, are you an effective impactmaker?

This is where strategy comes in.

Leaving Impact

Have you heard of the saying “leaving money on the table”?  This is generally not a good thing in business.  If you left money on the table, you could have made more.  Your business could have been more profitable and especially in a publicly traded company, profit is king.  You have to keep the shareholders or stakeholders of any kind happy.

This is where positive impact is different though.  We need the same desire and strategy but we have a different purpose.  Great non-profits, impact projects, and even purpose-driven businesses have a focus other than financial profits.  Finance is a key part of any effective organization but it’s not the primary goal.  

Ironically, after more than a decade in the financial industry (the business I referenced in my marketing examples earlier), I learned that some of the most inspiring financial firms I know have an incredibly detailed and effective understanding of their money and that of the clients they serve without it being the primary focus.  This tells me two things:

• The best organizations have detailed processes for most things.

• The best organizations have separated purpose from activity.

The firms I admire the most do excellent work for a reason that extends beyond just doing the work or making a profit.

Across all industries, the top organizations are indicated not by what they take but what they leave. 

Think of the people you serve.  What are they left with after working with you?  Does it make them feel better?  Does it make their lives better?  How long does it last?

Modern Legacies

You may not know, but Speaking of Impact is not the only podcast that I host.  I’m a traitor!  I prefer mercenary, but thank you.

“Modern Legacies" is a podcast about successful modern business people that are using their platform to create positive legacies.  It’s an offering of Initiate Impact and another effort of mine to speak with impactmakers.

The show is relevant because the guests are people that are “leaving a profit” in addition to making one.  There is no doubt that these people know how to make money.  But, they also know how to give it and other things that will make people’s lives better.

I believe it’s easy to understand “why” we should leave a lasting impact.  It’s the “how” that we often need help with.  

In today’s modern world a legacy is something that can develop rather quickly.  However, it can also be drowned out.

My primary suggestion to prioritize leaving over taking is to focus primarily on the needs of those you serve.  Then, identify what you have that could help.  Consider finance as one of the many tools you can use to serve.  

Ask people what they need.  Then, take a look at the tools you have and determine how you can help.

The business correlation here is accepting what you can and can’t do.  A good business and it’s employees cannot help everyone and if the tools that are available are not enough that’s okay.  Don’t promise what you can’t deliver.  It’s a bad look for the business when it doesn’t work out.  In the same light, it’s reasonable to be unable to help a certain situation.  There’s someone who can.

What’s Needed?

When you identify a need it’s hard to ignore it.  An impactmaker knows this.  It is however, important to know your limits.

If something is beyond your limits (it could be time, talent, treasure), don’t take it on.  Consider helping those in need by finding someone who can.  Might I suggest having your own database of impactmakers?  It would be great if you could pick a subject and look up the appropriate person to consult.

If you find the issue to be within your realm of impact, great!  Now you can focus on helping and making sure that you leave a profit.

Just like you measure your profits in business, have a way of measuring what impact you’ve left.  If you know that there are one thousand orphans in your county that need clothes, you measure by counting the amount of clothes you gather for them.   This is a simple example.  But, if you’ve put forth a lot of effort and only come up with ten shirts something needs to change.

Be Your Best

Every business has to start somewhere.  Impactmaking is no different.  Concentrate on being your best and leaving the best profit you can.  

A great business and a great impact project both have to push through the slim times to get to the celebratory times.  Another concept covered in my book is the plateau of latent potential.  I give much credit to James Clear’s “Atomic Habits” for explaining this concept to me.  It applies here for sure.  The initial effort to get something going can be daunting and the realization of progress might not come until you’re feeling some burnout.   Don’t quit before you get there.  Trust me.

Keep being the best you can in business.   Make great financial profits while you can.  Some years you may make less.  

Never leave cumulatively less though.  

Time + Talent + Treasure = Impact