How to Grow a Sustainable Profitable Business
By Chris Mandzufas
We have all heard the saying – sales are vanity but profit is sanity. The challenge every business owner faces is how to grow their business (sales) in a profitable and sustainable way.
Over many years Brentnalls WA has worked with all types of business from all different types of industries. When reflecting on the businesses that have been able to achieve growth in sales and profitability, the following diagram summarises the essence of those particular types of businesses. Essentially, from a big picture perspective they use their numbers to drive their strategy and they use their strategy to drive their numbers (it is a reiterative process).
- Get Organised
- Ensure your business has the ability to internally produce accurate, reliable and timely financial statements. If you cannot produce financial statements in this way you will be running your business blindly.
- Business Model Drivers
- Do you actually understand what drives your business’ economic engine. Are you clear on the products or services that actually make you profit versus those that do not?
- Set KPIs (Key Performance Indicators) and review them on a regular, timely basis. Be clear on the KPIs you need to monitor and how often they need to be monitored (some need to be looked at daily, some weekly and others monthly).
- Monitor forecasts at least every quarter and look forward at least six months with those forecasts.
- Set Targets
- If you do not set targets, how do you know if you are operating successfully or poorly? If you do not set targets, you cannot take corrective action in a timely manner to rectify your business direction in the market.
- Sustainable Competitive Advantage
- Today’s business environment is very competitive – you need to be clear on what differentiates you from your competitors and if you are not clear you need to start being clear. Are you different to your competitors on price, value or market segment?
- Strengths Weaknesses Opportunities Threats
- It is amazing how many businesses do not stop and analyse their SWOT and then look for opportunities to compete better in their market. There is gold in your SWOT but you have to find it!
- Key Strategies
- Every business owner has limited time and the smart ones are clear on what the highest ordered actions are to continue to outperform their competitors in the long term.
If you are seeking strategic advice or support with your business growth strategy, contact us today to learn how we can assist your business.