How many times, and how many managers, have you heard say and focus on cutting expenses or reducing margins? Virtually every company I go into, they talk about cutting in some capacity.
Is your company this way? Is that the focus of management? If so, they are dead wrong. You don’t fix by cutting. You can’t cut your way to profits. In fact, cut to far and you cut yourself out of business.
Why? Because the more you cut the more pressure you place on what’s left over. Worse, the pressure is placed on companies biggest internal asset - its people! Check any pressure cooker of a business and watch what happens. Its most valued internal asset quits, and that is the beginning of the end.
So if not cutting, what then? It’s all about top line growth. Expenses are not the problem in companies. Income is the problem. The top line of every single Income Statement is Revenue. It’s SALES. That’s what counts.
You want to improve margins, then increase your sales. You also have to raise your selling price. Easier said than done for sure. Do you know why? Because companies, your company and maybe even you, focus on cutting. You’re not focused on growth. You’re not focused on selling.
It’s obvious who’s focused on sales and who’s worried about cutting. Companies who focus on top line growth invest in top line growth. They spend the bulk of their budgets hiring, training and developing high producing sales teams. Why? Because they know that sales is the lifeblood of companies!
Interestingly your personal life is no different. Your problems aren’t your expenses. Your problem is that you don’t have enough revenue to cover your expenses. Go sell and earn more. Suddenly, your expenses are no longer an issue.
Our society has become so polluted with the supposed financial experts. They’re telling you to save and not spend, to cut back and to live modestly. “A penny saved is a penny earned.” No it’s not. It’s a damn penny. That is a bullshit set of lies companies and people have bought into. Saving is easy when revenue is high enough. Saving is not possible when revenue suffers.
How’s your revenue? How’s your lifeblood? Make no mistake, sales and revenue are everything. Shift your focus and invest. Expenses shortly will no longer be the issue.
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