Put profit first, not volume.
Your business is your money machine. To grow it, you must increase the amount of money it brings down to the bottom line.
The most important function that you have as a business owner is to make sure that your bottom line is on an upward curve. That may require changes in a mindset; it may need to be shrunk or increased in size. It may need more internal systems or even a product or service change.
Profit should not be “what is left”; it should be the prime focus of everything you do. In other words, every decision that you make in your business will affect your bottom line. Each action should be analyzed in relation to what affect it will have on your bottom line.
A large volume or a bigger market share does not necessarily translate to a bigger bottom line. Volume and market share growth must be looked at in relation to the increase to the bottom line.
The accumulation of cost over a time period must be kept to a minimum. Always keep your overhead as low as possible. Fixed costs have a tendency to creep up on a business which will result in a decline in business growth. As an owner you must keep a 24-hour-a-day vigil against the proliferation of fixed cost.
A single-product/service, a single-market business has a single source of profit contribution. If it expands to serve multiple markets, it will have multiple sources of contributions. A single market, if it goes away, will cause failure; by the same token, multiple markets that are not controlled by “profit production” can result in the same outcome.
It’s not only your product or service that is expected to produce a profit. Your time should also be a contributing factor. Spend your time on activities that have a positive impact on your bottom line.
“Spend your time on activities that have a positive impact on your bottom line.” Nick Petra
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