Don’t Ignore A Bottom Line Growth Strategy
Part of running a successful business is to always be on the lookout for ways to improve your business and sustain the success you’ve enjoyed throughout the years. However, with so many concerns and challenges vying for your attention, it’s easy to become overwhelmed. And, before you know it, efforts to strengthen your bottom line are put on hold while you trudge through the trenches, putting out fires and fielding employee concerns.
Step Away From The Trenches
Taking your company to the next level starts with allowing yourself to focus on what you consider to be the important drivers of your company’s overall growth strategy and ultimate success. There are two types of growth to note: top line and bottom line. Both are valuable when determining your business’s financial standing, but they are not interchangeable. Top line growth only shows how effective a company is at generating sales and does not factor in its operating efficiencies. Bottom line growth, on the other hand, outlines how efficient a company is with its spending and operating costs and how effectively it controls costs.
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The definition of business success goes beyond typical sales growth. It requires the blending of finance, operations and sales. Therefore, in some cases, growth is not synonymous with success. In fact, focusing on business success is ultimately what is going to take your company to the next level.
Focus On Bottom Line Growth
Establishing and maintaining healthy bottom line growth is the gold standard in business, but getting to that point isn’t always easy. As with most worthwhile goals, achieving a higher level of success means you must embrace change and adopt new behaviors. If you start putting your effort and resources toward this particular strategy, results are sure to come.
- Leadership: As a business owner, you have to become the leader the company needs for each level of success. As your business grows and becomes stronger, so must you grow and adapt.
- Operational Efficiency: Decide on key areas to evaluate and use quantitative and qualitative data to assess performance levels to determine efficiency and effectiveness. After you’ve compiled your data and studied the results, you can identify ways to enhance key areas of your business. As a result, you are sure to save time, money and organizational resources while improving customer and employee satisfaction.
- Product Mix: Focus your efforts on selling the items and/or services that bring your business the highest profits. Trying to do and offer everything under the sun only puts you at a disadvantage. Instead, focus on what sells – and sells well. Focusing on more profitable product offerings and deciding when to discontinue a product or leave a segment of the market will ultimately bring healthy growth and success for many years to come.
Of course top line growth deserves your attention; but the bottom line strategy is ultimately how you will maintain long-term success. You can use the principles outlined above to improve efficiency, enhance your products and achieve greater profitability.
Email Rea & Associates to speak with one of our professional business consultants about bottom line growth and how it can help your business.
By Kyle Stemple, CPA, CGMA (New Philadelphia office)
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