Excuses for Ignoring Profitability Management
Failing to manage or mismanaging profitability can lead to grave problems for companies.
Of the issues that fuel company closures, profitability management is one of the most pressing. Every company needs a profit stream. Establishing this can be done through a bevy of ways, including achieving a competitive advantage. Not every company has incorporated this important step into their business growth strategies, however. The reasons? They’re numerous. Here are some of the more common excuses to not manage profits:
- “I don’t have time.” Then don’t start a business.
- “I’m already managing revenue.” These aren’t the same. Profits are your net gains, revenue doesn’t include losses, expenditures, etc.
- “Our company strategy has already accounted for profitability management.” Maybe so, but are you actively managing?
You’re going to be hard-pressed to find a company that has achieved success without managing their profits in some form. For more on this subject, read the full article by Jonathan Byrnes.
Hint: You have to look beyond the website or pricing page.
Gross margin documents the business your product is building, yet it’s often tucked away in a financial update while a medley of product metrics enjoy the spotlight.