It is common for businesses to focus on day-to-day problems, new accounts, new opportunities, and growth. Everyone gets excited and the focus on “are we making money?” is lost.
In our work with business owners, there is an awareness of the bottom line, but the attention is usually on building the business, i.e. sales, new products, account development, etc. All are necessary, but when the company loses awareness of making and saving money, profitability is at risk
Here are two areas that can make a lot of difference to your long term. Profitability and Sales. If you can zero in on profitability first, and sales second you will see positive results.
Try these seven ways to refocus on both profits and building the business:
- Let go of the sacred cows, processes, people, and products that are more about the past than the future.
- Focus on profitability in every meeting – especially with the salespeople.
- Have a strong COO and CFO (one or both) and give them plenty of authority.
- Establish tight budgets and “no mistake” consequences for exceeding them.
- Watch expenses like a hawk and act like you have no money – (do this with a smile, too).
- Let everyone know what the company is planning to do with the profits (new equipment, expansions, pensions, new products).
- Measure and report on profitability monthly.
This may seem like an obvious thing to pay attention to (profitability), but in most companies, it gets little attention until after the fact.
Develop your own approach to include item 2 from the above list in your meetings. You will be surprised with the positive outcome.
Let me know how you do?
