Hang onto to your bottom line like your life depends on it, because it does!

I remember leaving my first meeting with the bank, the year that I founded Wolfgang and thinking “OK, he’s not quite as enthusiastic about my business as I am?” The bank was not interested in loaning me money. I was on my own and I needed to be profitable or the business would fail.

During my start-up I had no choice but to compete on price. Margins were tight, they still are. A thousand dollars loosely spent in the second quarter didn’t seem like much, but at the end of year, that thousand hurt. Two, three or four line items over budget, as was my case, and your profit is seriously compromised.

So, I learned to watch my overhead closely. Overhead is fixed. I had direct control over my overhead. If I overspent I had no one to blame but myself. Accountability, I love it!

Next, I learned to budget from the bottom up. In other words, I set profit goals not revenue goals and built my budget around the profit goal. This was a hard concept to grasp because revenue is sexy.  Of course, there is value in a revenue goal, it helps you to think big. But, revenue is useless without profit.

After a rough first year, I realized that I needed to track expenses properly. So, I bought some accounting software and soon after hired a bookkeeper. The particular software was not important, excel could have done the job. The lesson learned was that the budgets needed to be to be tracked weekly.

Once I had a smart profit goal and a proper tracking system, it all came down to discipline.

Ikea’s “as is” section furnished my office. I cold called and networked non-stop to generate leads. I bought used equipment and vehicles. Shopped my uniform, insurance, and marketing suppliers relentlessly. Grind, grind, grind . . . And, I utilized co-op programs (free labor) when I needed administrative help.

I am not saying that I haven’t spent money through the years. I have, you can’t grow without investing in your business. I just learned to spend on the right lines, track properly and to hold on to that bottom line.