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Thread: Basic business principles - It's about profit, not turnover.

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    Site Caretaker Dave A's Avatar
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    Basic business principles - It's about profit, not turnover.

    In golf, the saying is you drive for show and put for dough. Largely, this is true in business too.

    As a business owner, it's all to easy to get caught up in the pursuit of turnover. Whilst this might be good for the ego to grow a bigger business, the game is really about improving the bottom line. Focus on profit goals and shape turnover around it, not the other way round.
    The trouble with opportunity is it normally comes dressed up as work.

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    just me duncan drennan's Avatar
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    Hmmm....is it really or is it about cash in hand?

    When I say cash in hand I mean, can we pay the salaries, bills, loan repayments etc. and still be in a positive cash flow situation.

    Obviously they all go hand in hand to some degree or the other, turnover, profit and cashflow - they are interlinked and interdependent (makes me think of that song, "Love and marriage"..."you can't have one without the other").

    Problem with profit is that we manipulate it to reduce our tax liability. Things like depreciation (can't think of any others right now) are tools for reducing our tax liability (yes they are other things too, but you get the point).
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