10 Dec Turnover is vanity, profit is sanity
You’ve probably heard it a million times but I don’t agree with it. Turnover is the perfect measurement of business growth. If you’re focused purely on profit, it may be possible to become more profitable by shrinking your business. You could cut back on staff and reduce your premises, innovation and growth strategies. You’d make more profit, but you’d restrict your growth. As a long-term plan, it sucks
Huge corporations and low margin businesses need to be focussed on profitability, and of course, your business also needs to be profitable. But for the small business entrepreneur wanting to grow, a turnover target is exactly what they need.
Profit is the sanity check that ensures your ventures and endeavours make sense. As long as you have a solid business model that delivers reliable profit, and you have a keen eye on your financial measurements and bottom line, you’re in great shape to chase turnover. For small business growth, that’s sanity not vanity.
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