Don’t pay attention to the bottom line as you grow
The owner of the company whose profit and loss graph is shown in this post only cares about growing the top line – the blue revenue line which has grown significantly.
Look what’s happening to the bottom line profit (purple line). It’s decreasing as revenue increases.
If this continues, this company will grow itself out of business.
How? By running out of cash to pay its bills.
The challenge is changing the owner’s mind from a revenue perspective to a profit perspective.
His comment? “No revenue growth is boring.”
My retort – “No profit will kill you.”
I challenged him to, in 2026, increase profits by 30% instead of increasing revenue by 30%. Not boring and a great challenge.
And it will save his business.
Death by this little cut – paying attention to revenue only and ignoring the bottom line.
Want a financial statement review?
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Ruth King is well known as “The Profitability Master.” She is passionate about helping small business owners become profitable and stay profitable. For over 40 years she has coached, trained, and helped contractors and others achieve the business growth and goals they wanted to achieve.
Contact Ruth by emailing ruthking@hvacchannel.tv.
