So Happy Making 2% Net Profit. Really?

Should I be happy for you when you say that you made 2% net profit in my business? It’s good that it is green and not red. 

Let’s do some math. You have a $500K business. Two percent Net profit is $10K. A $1 million at a 2% net profit is $20K.

It takes a ton of work to run a business today; managing more than ever and leading a team to greatness is also an art.

In this very short rant today, I want to point out that the survival of a business depends on your net profit. Many are happy to have a positive profit figure on the bottom of their Profit or Loss statement. It’s better than the alternative of a deep red hole.

Appreciating the impact and power of net profit is realizing how you can use it for the business. Things like new equipment and tools, upgrading vehicles, investing in your people, paying debt, adding services, and a dividend to the shareholder(s) come from profits.

Look at the numbers above. Let’s just consider you’ve started on a path to reenergize your CEO learning curve. You move into an uncomfortable zone of learning what you do not know and how to make money. So you do $1 Million, and your goal is to earn twenty percent. Now, your net profit would be $200,000. Just think of all you can do with that profit for the good of your people, clients, and the business.

We’ve dedicated the last eight years to helping Advance the Service Aftermarket. We have loads of content to help you appreciate more business success. Here is a group of episodes that can start you off on a higher degree of success. https://bit.ly/3GqH4oO