The Profit vs. Growth Exercise – It Will Unlock Hidden Gems

Dec 19, 2023 | Financial, Growth Tips, Income, Management, Planning, Strategy

If you could only achieve profit or revenue growth next year, which would you choose to focus on?

That’s the question I want you to consider, as you lock down your plans and budget for next year.

How much do you plan to grow in 2024?

I find that growth comes easy for most entrepreneurs. They are hardwired for it.

However, not enough time is spent figuring out how to improve the bottom line, which is a missed opportunity.

For this reasons I recommend the following exercise.

The Profit vs Growth Exercise.

Take 2-3 hours with your leadership team and do the following:

  • Spend 1 hour and white board all the actions and investments you would need to make to grow top line revenue by 20%.
  • Then spend 1-2 hours and white board all the decisions you would need to make to just grow the bottom line by 20% (or more!)

You will end up with two different lists to compare and contrast – it’s eye opening.

Fit your list of ideas into this Venn diagram labeled “Profit-Driven Strategies.”

About a third of your ideas will fit in the far left set, “Profit Growth” and will directly drive profitability and efficiency.

Another third of the ideas will fit in the middle section “Common Strategies”, and will impact both profitability and revenue growth.

The final third of your ideas will fit solely into the “Revenue Growth” set on the right, and will not directly impact profitability.

The Mystery of Growth.

After coaching over 350 companies, I have learned two things:

  1. Adding revenue does not necessarily guarantee profit growth, however…
  2. Increasing profitability and efficiency almost always guarantees that top line growth will follow.

Your Challenge: Do this exercise with your team and uncover the missed opportunities.

Use this thought-provoking question when you hold this meeting:

“What if we could only focus our energies in 2024 on growing profits? What would we implement or change?”

Your team will benefit from this discussion AND you may be surprised who comes up with the best ideas.

Don’t worry about holding back growth: High Profit Destination Companies® are always growing, you can’t stop them!!

What If You Are stuck?

For some of you that have hit a revenue ceiling and are having trouble growing, it’s a whole different story.

There are certainly some big moves you need to make, separately from the discussion on profitability.

Hit me up if you need help.

Otherwise, try the exercise and tell me what gems you discover.

Happy Holidays Y’all! Don’t forget the neediest this holiday season – be someone’s angel.

Regards, Jeffrey Scott!

P.S. If you are looking for support in owning and growing your business, join our new high-impact peer group, kicking off March 4-6.

Enjoy a $1,000 holiday discount for those who sign up in December.

Social proof: I just got this great message last week from a happy client:

“We’ve been working with Jeffrey and the peer group since 2018. It has been an incredible resource for growing professionally and personally, continually improving our business and team, while meeting like-minded individuals and making friends along the way.”

Anthony Olender, President, Oceanview Landscapes, NY