Why Profitable Growth Now?
Before the financial crisis, most businesses could coast along and rely on their credit lines to make up for shortfalls in sales.
“Good” customers could be subsidized and customers who didn’t pay or went under could be ignored by just borrowing more cash. For the firm, slumping quarterly revenues and rising expenses could be carried forward by financial wizardry and leveraging a balance sheet.
While the lessons of doing business without credit and cutting expenses to the bone have been learned, how can one grow a business back to where it was and forward after the financial crisis? Without fads like buyouts, rollups and ESOPs, an owner, financier or organization should return to the oldest source of creating growth in the book. Sell more products and services and do so at a profit.
Profitable sales means focusing on:
- Higher gross margins from differentiating your value and de-commoditizing your products and services profitably
- Knowing that every sale you make is profitable by customer, order item or services
- Managing your balance sheet for liquidity instead of credit where the biggest assets are customers’ predictable purchases.
- Creating a wealthy company that can be sold for cash and secure the lifestyle of its owners now and later.
Profitable Growth is not a fad, or just a program to get by in the short term, but a way thinking about your business, investment or organization. It starts with knowing who is paying you for what value and continuously working to repeat this. It is a pay-as-you-go approach to growing your business that reduces dependence on borrowing money, and increases the wealth of a company and the security of its owners and all who rely on it.
Whether your business has major growth or returning to growth in its plans, this blog will focus on the tools, techniques and real-world examples for creating Profitable Growth!