The Myth About Sales

culled from:hybridbizadvisors.com

It’s a common belief that ‘as sales go, so goes the business’. As a result, revenue growth tends to top the list of priorities for small business owners. It’s the milestone that gets the most attention. It’s the most important number – or is it?

As a business owner, sales growth is simply one metrics on the score card. If sales alone guaranteed success, then WorldCom, Enron and Blockbuster would still be in business. Sales are important – but profit and cash flow are king.

So as you plan for the coming year, look beyond sales. Seek opportunities to improve profit and cash flow. Here’s a few things to consider:

    How can I improve my gross profit margins? Whether you raise prices, reduce costs, increase labor efficiency or eliminate products (or customers) that are profit busters – do something! If your products and services are not generating good margins, selling more won’t help the bottom line.

    How can I reduce debt and/or monthly payments? While some level of debt is normal in business, it needs to be manageable based on your profit. Excessive debt can kill cash flow. And yes, ultimately kill your business.

    How can I improve efficiency and effectiveness? Often overlooked, this area has a lot of hidden profit. Whether you improve your scheduling, delivery and collection or eliminate mistakes and costly re-doing of work, systems build profit – and make life a lot easier!

    How can I get more from my current customers? Don’t limit revenue growth to new business – products, markets or customers. Build plans and tactics to keep current customers coming back and buying more. Then be consistent with your efforts!

Never ignore sales, but give profit and cash flow the same priority. Together, they form the nucleus of a financially successful business!