There’s different ways to look at growth. Potentially more profit, more problems; 1 point growth means 1 point more
profit means one point more problems and work. Or is it? While that’s how the general theory could look like, it actually isn’t the full truth. By making new products with the old machinery/resources you can expect to take 60% profit. So - in case of increasing the number of trades or projects, expenses grow slower than income.
But there’s one thing to keep in
mind though. Generally speaking, growth is good, but you need to think further. Growing your business bigger should not be your main goal, it shouldn’t be. It’s not about the number of projects/products/businesses you have, but it’s how much
profit they bring in in %. That’s one often overlooked aspect in growth. Everyone wants to grow, but often growth becomes a goal all by itself while actually the reason for growth should always be to make more profit, to get bigger
profit marginal. But one company with 10%
profit marginal or two companies with 5%
profit marginal – there’s no point in two companies here, only more headaches.
To put the two ideas together, the purpose of a company should not be just income nor just growth, but profitable growth. It’s simple idea, but business owners often tend to forget all about it.
