The bottom line: is it the only thing that matters?

Ok so no one (unless you’re a not for profit) goes into business to not make money. Everyone is here to make a living of some sort. It’s how we keep a roof over our head, feed our kids, enjoy life in general. BUT. Once you get past the point of earning enough to live. Is it the only thing that matters? Should increasing profit be your main driver and motivation for all of your business activity? If it is how do you do that without sacrificing anything else?

I’m going to ruin the rest of the blog now and say no it’s not. Just saying. Sometimes you have to level out or take a hit in order to scale or simply if something aligns with your values and costs money then go for it. I’ve got some examples….

Outsourcing

Obviously, this is number one. I run a business that provides outsourced administration professionals to businesses. Shamelessly putting myself first here. Anyway, outsourcing will cost you money. Unless you are going to outsource to an offshore company then it will not be a ‘cheap’ solution. However, outsourcing certain tasks can have massive benefits and can give you some cost savings! If you compare outsourcing an Executive Assistant to employing one, you can actually save quite a bit of money. A highly skilled Executive Assistant in Auckland can command a salary of $90k, more for some industries. If you need someone sat in the office and supporting multiple people that are office based this may be the option for you. If you don’t need someone physically sat there then outsourcing can shave a good $10-$20k off that yearly cost (when looking at covering a full time role), that’s not even taking into account annual leave, sick leave, ACC and any other benefits you won’t have to factor in.

For small businesses outsourcing isn’t just about delegating tasks. It’s about freeing up your headspace, leveraging another skillset and taking the next step in a growth phase. Whether it’s administration, marketing, IT or accounting. Outsourcing more than likely has far more benefits than costs.

Exit strategy

Guilty party over here definitely doesn’t have an exit strategy. I’ve been told so many times I need one, I know I do please don’t remind me…again. Anyway, if part of your exit strategy is to sell your business at some point it’s going to need to be fit for purpose, relevant and profitable. Your bottom line matters, but so do your people, systems and processes, strategy for growth and assets. Don’t be fooled into thinking a sexy looking profit will make people want to buy it.

Lifestyle

If you want to increase your profit but don’t want to increase your workload then you’ll need to look at your efficiency and pricing. Maintaining the lifestyle you have but increasing your profit margin won’t happen if you don’t do anything about it. Implementing systems and processes and developing a pricing strategy aren’t free so yes, this will affect your bottom line temporarily. Once implemented though you could see your profits increase with little no to no extra work. Especially if you outsource these 2 things. Lifestyle is a huge reason I hear people talk about when they get into business. Don’t sacrifice it to ‘make more money’

Alignment

Sometimes an opportunity comes along. A massive contract, an offer to buy your business, a new idea. All can come with huge financial gain. Is it what you want though? Do you align with what’s being offered? I often get distracted by shiny things. Lots of new ideas come into my head all the time and I have to work really hard on identifying if it’s an opportunity or a distractor. Again, for me it comes back to lifestyle, does it keep the lifestyle that I want?

Community

Giving back to the community is very important to me and I know it’s important to a lot of business owners out there. Will it take away from the bottom line, yes. Does it matter, no. I am president of my local BNI chapter and one of our values is Givers Gain. It’s so true, you gain so much more from giving back. If it’s really important to you and you have the means to do so, then I think being involved or partnered with a charity or community group if far more important then a few extra numbers in your Xero.

Basically no, your bottom line isn’t what defines your business, it’s not the only thing that matters. You need to make a profit, that’s why you’re in business but you also need to think about what else is important. I made the mistake recently of looking at my profit for the year and thinking god those 2 months were shocking but I also forget what else I achieved in those months and looking back they were some of my best months in terms of everything else.

Forget the bottom line, go have fun. (This is most definitely not financial advice, in fact it’s terrible advice) but you get the drift.

I hope you look at your profit and loss with a new lens now 😊

AC

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P.s if my accountant reads this I’m joking the bottom line is front and centre 😊