A short video by Kenny Chapman (the 'blue collar coach') advising contractors and small business owners to prioritize profitability and overhead management over blind revenue growth. He argues that growth doesn't automatically create profit and encourages focusing marketing and operations on existing markets to 'make more with what you've got,' while making deliberate choices if sacrificing profit for growth.
Hey everybody, Kenny Chapman here, the blue collar coach, coming to you live with this week's video version of Freedom Friday Focus. Now, this week we're talking about more making more now, creating more growth, creating more profit, creating more potential than what we're currently executing. Now think about any industry event you go to. It could be a trade show, it could be a national event for an organization you belong to. It could be one of the roadshow type things. Whatever it is, you invariably see conversations going on. They happen in the bar, they happen outside at the smoking area, they happen in the seminar rooms, they happen in the hallways. They're always focused around growth and how much are you going to do this year and what are you growing and how many trucks and all these kinds of things. But here's something that sometimes along the line we forget and that is growth does not create profit. Sales don't automatically create profit. And yet we're kind of taught with what I call this top line intoxication, right? My personal company has been larger in revenue than we are currently, but it's never been more profitable than we are currently now. Why is that? Because we've learned that how to manage overhead, how to keep that in check. But more importantly, we've learned how to to produce more with the calls that we have. So think about what's going on. We're all looking at budgeting for 2014. If you're not, you might want to start thinking about what your plan is for 2014. What are you going to do next year? What's going to be your revenue? What's going to be your sales number of that? What's your overhead going to look like to position you? How are your margins going to come in? What type of a gross margin are you after? See, I see so many contractors that talk about growth and then they go to the next county over, they go to the next zip code over, they go to the next city over and spread out instead of hammering focus into this specific area. One of the things that blessed me early on is I work in a very small market. So we had to continue to pound our marketing pieces time after time after time right in our own backyard, because that's the only market we serve in the city. I see people get started in their local area and then, oh man, I'm doing a million in revenue. I got to move over here now when they could be doing 5 million in revenue without moving at all. Make more with what you've got. I mean, would you rather have a 6 million dollar company doing 5% net and making 300 grand? Or would you rather have say a 4 million dollar company doing 15% net and making. What's that? 5, 4, whatever the number is, Right? So, so think about the math. Think about what you're doing. Everything has to go to drive a revenue dollar. A lot of support and a lot of things have to happen. Sometimes we can shake out a lot of profit never growing that top line. Now don't get me wrong, I'm not saying don't grow. I want you to grow. I want you to grow as rapid as you can effectively handle. If you're going to give up profit for growth, then make a conscious choice and have that as part of the plan. But don't be reactionary when it comes to profit. The strong contractors that made it through the downt really well and are killing it better than ever right now are the ones that are profitable. This needs to be you too my friend. Have a better than fantastic week because I'm Kenny Chapman, the blue collar coach and you know that we'll see you again soon.
