As a small business owner, you’ve done the hard yards and built yourself a business.

You’ve got sales coming in and your business is growing, but there’s not much more to show for all your hard work … your profits aren’t increasing and you’re certainly not out living the life of Riley.

Frustrating isn’t it … I know because I’ve been there and I sometimes look back now and feel it was almost a rite of passage in my personal business growth.

So, as the famous Professor Julius Sumner Miller used to ask “Why is it so?”

Well, the answer is fairly straightforward and possibly lies in one of those conversations that have to be had and you’re avoiding …

It’s probably because you don’t understand your business numbers and the metrics that drive your profitability.

But hey, in this day and age of so many conflicting messages being fired out on social media forums by business coaches and gurus wanting to sell you one form or another of overnight magic pill for sales or business growth without ever having owned a business, it’s easy to understand how such simple skills as managing and tweaking your numbers to literally transform your business overnight, get overlooked so easily.

The fact is that increasing your sales and growing your business is not the solution to your long term business success.

Over the years, even in my own businesses, I have seen countless instances of sales increases and business growth driving profits down.

In one instance in a product based business, the business owners were so driven by selling more units that they introduced a lower priced and lesser quality range of products to capture more of the market.

The net outcome was several thousand more units sold but almost $1,000,000 wiped off the company’s net profit as the lower priced product decimated sales of the higher priced and much more profitable premium product the company had become known for.

Not only was there a massive profit hit but the brand reputation was seriously damaged  … all because management chased sales growth instead of profitability. Needless to say heads rolled (happily not mine)!

It is profitability that is the key to your sustainable, long term future growth and success … and the lifestyle you are looking for. If you’re in business to make a difference or leave a legacy, it’s your profitability that will allow you to make the biggest impact.

This was recently demonstrated yet again with a good sized, service based small business delivering outcomes that make a huge difference in the community.

Not unlike the situation described in the opening to this article, the owner had built a successful business but the more it grew, the less profit there was. It had become tiring and frustrating.

When we looked at her numbers and what was driving her profit … and eroding it, it soon became clear that the more the business grew, the more the back end costs (think rent, wages, supplier costs etc.) increased.

So we did a bit of re-structuring of her pricing and service offering to maximize services which generated the highest profit and eliminated those services necessitating third party and other back end costs.

The end result … overall less sales but more premium sales, delivering much higher profits at reduced costs.

In her own words:

“In just 4 months, I was able to make more profit in the last 3 months of the financial year than I did for the other 9 months.”

You see, this really is straightforward and really does work.

It may not seem sexy or have some clichéd title, but I can promise you that if you don’t understand your numbers and how to drive your profits, it is probably the most valuable advice I, or anyone else who has built a business the hard way, could offer you.

And if you are in that situation with your business seemingly growing but your profits flatlining or taking a nosedive, then it’s time to take ownership and turn it around.

CLICK HERE to book a time with me and I’ll show you how.

Let’s have that conversation that needs to be had!