Business Growth versus Profit
We have witnessed business owners chasing sales to solve cash flow and profit issues.
This doesn’t always work.
When owners focus only on sales growth they tend to scramble to grow at any cost.
They say YES to all customers – including the bad ones.
They say YES to bad projects.
They say YES to an increased level of stock in anticipation of an increase in sales.
They say YES to anything that resembles a sale.
This is done all in the hope of growing the business.
When owners focus on profits, they understand that not all sales are worth pursuing.
They say NO to customer demands that are outside of their core business model.
They say NO to sales that are not within their capabilities or competency levels.
They focus on their vision. They control their actions.
They don’t execute every opportunity that comes their way.
They master what they do well and deliver with profitability in mind.
To solve cash flow and profit issues you need to do more than just increase sales.
Give consideration to the type of sales, gross margins, customer profitability per sale, the return on investment on salespeople, and so on...
When businesses focus on achieving healthy profits for every sale, they are more likely to be in a better financial position than those that only focus on sales and growth.
Where is your current focus?
Do you need to shift your attention?