10 tips to make 2026 super profitable (pt 2)
“An investment in knowledge pays the best interest.” — Ben Franklin
Happy new year fellow profit seekers!
As a gift for the holidays (the kind that pays you!), we’re highlighting 10 tips to make 2026 your most profitable year yet. Last week, we covered #1-5 to set a foundation, and today we’ll get tactical with #6-10.
Here they are:
- Hold your fixed costs (keep ’em fixed)
- Set a salary cap (reverse engineer labor costs)
- Audit your inventory (convert to cash)
- Check your marketing efficiency (only pay for customers)
- Calculate your breakeven point (fight cost creep)
6) Hold your fixed costs
Fixed costs hang around regardless of your revenue. You’ll need to pay for these things whether sales are zero or $1,000,000.
Examples would be: rent, utilities, maintenance contracts, loans, salaries, insurance, software subscriptions, etc.
If you keep fixed costs flat over time while growing revenue, then profits will explode higher. And what’s the best way to keep fixed costs fixed? By paying attention to them!
Your first “mission” as a business owner is to know & cover all fixed costs.
Pull out your monthly P&L from tip #4 and add your fixed costs to that step. If you build a good habit of monitoring your monthly expenses looking back 6-8 months at a time, you’ll be able to see these fixed costs with your eyes closed.
Also, if you need to modify your chart of accounts to better see these expenses, do it.
7) Set a salary cap
Struggling with high payroll expenses?
Try setting a salary cap.
ust like a professional sports team, you can manage your business by “solving” for specific expenses. Let’s say you have sales of $1,000 and want to make $100 profit. That means you need to keep expenses at $900. Of those $900, maybe $400 are for materials, overhead, etc. which leaves you with $500 to spend on payroll.
Compare that $500 estimate to your actual payroll costs. Then ask yourself some questions:
- Where can you make cuts?
- Where can your team be more efficient?
- How much additional revenue would you need to hit your profit goal without changing payroll?
A salary cap is a great planning and benchmarking tool.
8) Audit your inventory
The goal is to minimize inventory on hand while maximizing revenue.
Every inventory-centric business should spend time periodically reviewing their inventory position. For these businesses, it’s the largest potential source of cash consumption.
How can you tell if you have too much or too little inventory?
Like the cleaner in Toy Story 2, you’ll need to probe your inventory at a level of detail never seen before.
Start by building a “source of truth” master item list, grab a friend and knock out a full physical count to get accurate on hand quantities, then start segmenting with the “ABC” method (A’s are top 70% of sales, B’s are next 20%, C’s are bottom 10%), set basic reorder points and never run out of A’s and B’s.
Inventory planning takes practice and an extreme detail orientation. Do a deep dive at least a few times each year.
9) Check your marketing efficiency
Why is growth so important in business and life?
Let’s say you were making $1 and saw no growth over the next 5 years. Your $1 from 5 years ago is worth only 80¢ today. This is why we have to play the game.
To grow, we need new customers, and new customers require marketing.
But we don’t want to spend marketing dollars that don’t bring in new customers.
Enter: marketing efficiency.
A few ways to track how effective your marketing dollars are:
- Track “top of funnel” potential customers like foot traffic or visitors to see whether you’re getting more people visiting you (this works with physical, digital, or B2B businesses)
- Track the number of “new” vs. “old” customers buying from you
- Track your percentage of marketing & ad expenses to total revenue over time (look for a stable or decreasing %)
It’s a lot of tracking, but these are good KPIs to get a window into the effectiveness of your marketing dollars.
10) Calculate your breakeven point
Breakeven can be a revenue number or volume number.
It’s the point at which you have zero losses and zero profit; complete equilibrium.
Why does this matter?
Your breakeven is not something you calculate once and it’s set in stone forever; it changes constantly, especially when you’re growing and adding more expenses and people to your business.
Knowing your breakeven point is a great way to combat “expense creep.”
Also, if you have a profit target (hint: you should), then you can use the same breakeven formula to find the sales required to hit your profit target.
The breakeven formula is simple:
Hopefully by now you’re realizing how important is it to know your fixed costs (see tip #6).