On today’s show we are talking about how to size your business into the future.
Some people think that profitability in a business is something that happens. Profit is what is left over after you subtract expenses from your income. Yes, that is the math for calculating what your profit will be.
But that doesn’t mean you don’t have control over your revenue or your expenses.
What should you do when you are experiencing a downturn in business?
There are three ways to grow your business.
- You can acquire more customers
- You can raise your prices
- You can sell additional products to your existing customers
But then there is another tactic. Some businesses lower their prices in the hopes of stimulating more sales.
There is one more way to grow, and that is by growing inorganically. That could involve the purchase of another company, a production, a division, even a customer list. Growth through acquisition is a legitimate way to add top line revenue, and even bottom line contribution. It represents an opportunity for operational savings. You might be able to rationalize and reduce core admin functions like HR. Finance, maybe some marketing overhead and so on.
It often seems counterintuitive. In moments of stress, the natural instinct is to tap the brakes. But you know that if your car starts to skid, applying the brakes will cause you to spin out. Sometimes the proper corrective action is to hit the gas in order to get the car moving along the right trajectory.
So it is with a business.
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Host: Victor Menasce
