By Christy Lawrence

Sitting in a room with more than 40 business owners, I asked a simple question: “Who in this room wants to increase their profits in 2018?”

Every hand raised.

Christy Lawrence,

Not surprising as when you’re in business, you want to turn a profit. Yet in the quest for profit, few business owners ask themselves the question —  what does success really look like?

Profit is one of the most important measurements in determining the health of a business but it’s not the only one.

For a micro or small business to be truly successful, it needs to achieve three criteria:

1. It needs to be financially viable. This seems pretty clear cut, and yet often small businesses fail because the numbers simply do not work. If there’s not enough revenue coming in to cover overhead, let alone future growth, a business can’t be profitable. It is essential that micro and small businesses ensure that their overhead calculations include both a livable wage for the types of employees it wants to attract and retain and a salary for the owner that not only helps them pay their bills, but also paves the way for financial security.

Fundamentally, your business has to support itself financially. It needs to consistently cover the costs of your overhead and still have money left to support the long-term vision you have for the business. If you’re a single operator looking to create a lifestyle business, this can include having adequate funding to create a new website as technology changes, spend money on an advertising campaign or consistently have enough funds to cover your quarterly taxes.

If you’re looking to scale the business beyond its current structure, this can include having the revenue to move into a larger office space, invest in customer relationship management software to track your progress or hire the support you need to create a strong company culture.

2. It needs to be sustainable, personally and professionally. This is where most micro and small businesses struggle the most. They run in to capacity issues because the business wasn’t built with sustainability in mind. When they started their business, they believed that if they provided great service and quality products that they would be a success, but there’s more to the equation.

It’s common that as a business grows, it begins to demand more time than the owner and team have to give, creating a situation where the owner is faced with spending too many nights trying to decide if they miss another dinner with the family or a deadline for a client.

Both of these are losing options. Occasionally, it happens to all business owners. When it starts to happen regularly, it’s a signal that capacity issues haven’t been addressed and that the businesses isn’t sustainable without some serious changes. If left unaddressed, capacity issues lead to sloppy work, dissatisfied customers and burned out owners and employees.

For example, a wedding planner I worked with who had an eye for style and class grew her business quickly but before she knew it she had no weekends to spend with her family and friends, let alone time to travel, which was a passion of hers. She hadn’t factored in her true capacity and the time investment needed to succeed into her original business plan. She began to resent her business and the quality of her service began to suffer. It took hiring a team of planners and changing the fundamental structure of her business to overcome this challenge.

3. It needs to be meaningful. For a business to be truly profitable it needs to add value beyond the bottom line. The business needs to create meaning and value for the owner, the employees, the customers and the world at large. The primary ways to create value and meaning in your business is by what you do, how you do it and why you do it. Sometimes that meaning comes in simply seeing customers smile, or watching them create security, or seeing them feel beautiful for the first time in years. Ensuring that the business is aligned with your personal values and the values of your customers is a good place to start.

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Christy Lawrence is the owner of Time to Profit, a consulting business. She is a master certified small business and executive coach with more than 15 years of sales and marketing experience with Fortune 500 companies.