I speak to a lot of executives, chief executives and commercial managers around business metrics and what is important in a business. What matters in driving your business? What is important to be sustainable and successful? How does this translate in to a financially sustainable business long term?
One of the arguments I have with many of the people above is whether you should pursue growth and increased revenue or focus on running a business that may be smaller but more profitable because you have chosen to.
For publicly listed companies, I can understand the focus on growth to continue to provide sustainable earnings and a return to their shareholders. By continuing to pursue new markets, services and industry sectors this provides opportunities to deliver on this commitment. It makes sense even though I would argue that it should not be at the detriment of good earnings and profit which I know as a shareholder is important long term when choosing to invest in a company.
However, for smaller businesses, I don’t understand the logic. Continue reading