Building Sustainable Businesses: Profit-First Approach

“It’s not the daily increase but daily decrease. Hack away at the unessential.” – Bruce Lee

In the world of business, growth is often the number one priority. But growth without profit can lead to a fragile business model that’s susceptible to any minor setback. What if we focused instead on creating businesses that are not just growing but are sustainably profitable?

Consider the story of Alex, a fictional entrepreneur, who runs a successful fitness app. Initially, Alex was all about gaining more users and expanding his offerings. While his user base grew, profits were meager. His business was growing, but it wasn’t sustainable. Alex realized he needed a change in strategy.

He started by implementing a profit-first approach. Every time his app made a sale, Alex set aside a predetermined percentage for profit. The remaining amount was then used for business expenses. This approach forced Alex to critically evaluate his expenses and prioritize profitable growth. His business transformed from a rapidly growing, but cash-drained entity into a profit-generating, sustainable business.

Sustainable businesses are not just about the environment; they are about creating models that are financially viable and resilient.

Action Step: Evaluate your growth strategy. Is it focused purely on expansion, or are you taking profitability into account? Try implementing a profit-first approach and see how it impacts your business sustainability.

Creating a profitable, sustainable business isn’t about limiting growth. It’s about ensuring that growth is strategic, controlled, and conducive to long-term success.

For those interested in further exploring this strategy and its significant implications, check out our book of the week: “Profit First” by Mike Michalowicz.

Pin It on Pinterest

Share This