What Profit Target Are You Hitting?
What Profit Target Are You Hitting
Are you successful at hitting what you are aiming at? How do you know what target is the one you should be aiming at? Small businesses have always had a challenge with identifying the proper profit target for their business. In fact, many new businesses go out of business before they consistently turn a profit, much less worry about attaining a certain targeted profit amount.
Our LifeLongU™ blog today explores ways a small business owner could focus their aim on different targets of profit. You may be reading this and think, “Isn’t that what all business owners focus on.” I don’t believe they do. Many I have met think about sales first. They become sales driven organizations with processes focused on driving up sales, whatever the cost. They have a philosophy that if we only had more sales, we would make more profits which is very dangerous and can hurt a company as quickly as having no profits can. This way of thinking can create lots of sales activity, lots of risk, lots of cash being funneled through the business and lots of extra loose spending if proper controls are not in place to protect profit margins. It can also create a “feeling” of profitability within your business, which might be false.
Are you clear on what profit you or your business are aiming at? Are you hitting it? Are you sure that is a good goal for your business?