The VPS Framework: What It Is and Why the Order Matters
If you are new to our weekly entrepreneur newsletter, welcome! Each week we research the issues that impact small business owners and entrepreneurs, then share insights, strategies, and expertise to help you overcome challenges and achieve your goals. We hope you enjoy the content!
In This Issue
- The VPS Framework—What It Is and Why the Order Matters
- Step 1: Building Unshakable Visibility
- Step 2: Turning Visibility into Higher Profitability
- Step 3: Scaling What Already Works (Instead of Spreading Losses)
- Quick-Start Tips for Each Stage
Why VPS—And Why in That Order?
Every owner wants to sell more and earn more—and many aim to expand. But the sequence matters. Our VPS framework ensures you build on a solid foundation:
- V – Visibility
- P – Profitability
- S – Scalability
Skipping ahead—growing without clear numbers or scaling a loss-making model—only accelerates problems. Here’s how each stage builds on the last:
Step 1: Visibility — Get Your Finger on the Pulse
What it means: Clean bookkeeping, clear reporting, and a solid understanding of cash flow. Without visibility, every decision is guesswork.
Why it must come first:
- You can’t fix what you can’t see.
- You can’t invest or strategize without knowing your true cash position.
- You can’t improve profitability if you don’t know your current margins.
How to get it:
- Tidy Your Books: Reconcile every account monthly, not annually. Need help? Let us know.
- Automate Data Flow: Use cloud tools like QuickBooks that sync with banks and POS systems.
- Track Key Metrics: Monitor revenue, gross margin, net profit, and cash weekly.
- Use a Dashboard: One-page snapshots beat 30-page reports no one reads.
As visibility improves, stress often drops—because you finally know where you stand.
Step 2: Profitability — Fix the Engine Before Hitting the Gas
What it means: True surplus cash, not just revenue. With Profit First allocations, every sale feeds separate buckets for profit, owner’s pay, taxes, and expenses.
Why it must come before scaling: A business losing money on each sale only multiplies losses when you grow. Tighten costs and optimize pricing first.
Small moves, big impact:
- Implement Profit First percentages at your current sales level—start with just 1% to profit.
- Audit Pricing: Raise rates on non-price-sensitive offerings and bundle services.
- Trim Fat: Eliminate low-ROI subscriptions and expenses.
- Optimize Product Mix: Spotlight high-margin items and phase out distractions.
When you’re reliably profitable today, every additional sale adds to your bottom line.
Step 3: Scalability — Grow What Works, Not What Hurts
What it means: Expanding sales, operations, and team without proportionally increasing headaches and costs.
Why last?
- You know your numbers (V).
- Each sale generates profit (P).
- Now growth fuels healthy cash flow, not deeper debt (S).
Scale-up levers:
- Systemize Processes: SOPs and automations let you add volume without chaos.
- Hire Smart: Onboard roles that amplify profitable systems, not patch holes.
- Market What’s Proven: Double down on channels and offers with the best ROI.
Quick-Start Checklist
First actions you can take this week:
- Visibility: Reconcile bank & credit card accounts; set up a simple KPI dashboard.
- Profitability: Open a separate profit bank account and transfer 1% of every deposit.
- Scalability: Document one repeatable process (e.g., client onboarding) so it can run without you.
The Bottom Line
Visibility is the foundation. Profitability is the engine. Scalability is the accelerator. Follow the sequence—V → P → S—and you’ll grow revenue and keep the cash your business generates. Skip the steps, and you risk scaling stress, debt, and sleepless nights instead of sustainable success.
Schedule Your Strategy Session Now
See you next week!
