Profit not Revenue

Too many business owners are fixated and focused on revenue and revenue growth – but have no idea what their profit margins are and whether their business is actually making any money or not.?

Revenue growth is great – and is definitely a metric that we measure with our clients. But your profit margins are the lifeblood of your business.?

Your profit margins tell you how your business is performing and whether anything is broken or needs attention.?

If your revenue growth is good – but your profit margins are poor – that’s an indication that your delivery, systems & operations needs work & attention.?

There may be an issue with your team delivering the projects or maybe it’s something as simple as an internal comms issue.?

But without tracking the profitability of your business – you wouldn’t even know that something is wrong.?

In order to maintain a healthy and successful business, you should be aiming for 30% net profit or higher. That’s what we aim for and measure every single month with our Boardroom clients.?

The other thing to consider, if you’re looking to sell your business or just want a business valuation, the profit you make will be one of the determining factors taken into account. The higher the profit, the better the valuation.

So instead of a sole focus on revenue, concentrate on both profit and revenue.?

Revenue-wise, think about what you can do to make more money and grow your business.

To increase profit, you’ll want to think about how to make the business better i.e. promote business efficiency.

There may be times during your business journey when you put more focus on revenue growth and other times when you focus on bedding down systems, operations & business efficiencies to increase profit.?

But overall, tracking and improving both revenue and profit is the winning combination.

If you’d like to learn more, please take a look at my most recent podcast episode on this exact topic:

Click here for the podcast episode.

Click here to watch the video.

Josh ‘Profit Focus’ Stone

PS: If you’re interested, here are 4 ways I can help you right now:

1. Join the Leaders In Engineering community designed specifically for leaders and business owners

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2. Download our FREE PDF guide – “How To Build A High Performing & Highly Profitable Engineering Team”

Learn the skills to get the most out of the people around you. Build a high performing team that generates incredible profits and allows you to have more fun and to spend more time with the people you love – Click Here

3. Book in a Catch Up

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Join our training program designed to help you focus on the core areas of growing your team, your business and yourself in the process. Together we'll work on winning work, business development & client relationships. We'll look at strategies for team performance, project performance as well as your leadership skills to motivate and get the most from the people around you. We'll also focus on your growth as a leader, effective delegation to those around you and only focusing on the strategic activities that move the needle and make the biggest difference. - Just send me a message with the word “PROGRAM” and I’ll get you some more information.