I do business tax returns and can compare two construction companies that both have a little over $3 million in sales. One is fast growing with a normal bank balance of around $500,000. The other company is much more stagnant and is always struggling to make payroll and cover expenses.
Now both companies are in the construction field in El Paso. So what is the difference? It’s really very simple–one company is very profitable and the other keeps increasing labor and other expenses as they grow.
The key to business success is very simple. Business success is completely related to owning and running a highly profitable business.
Highly successful business owners understand that in business, the only thing that matters is profits!
A profitable business provides the means to support the business owner and their employees while also paying all vendors, bank loans, tax liabilities, and investors.
A profitable business is much less stressful to run since it always has a reserve fund to cover temporary downturns in business.
A profitable business has the resources to take advantage of opportunities to increase profits when they arise.
And a profitable business is an asset that grows in value for when the business owner wants to cash out.
So what is business success? In my opinion, it is building a highly profitable business, with little or no debt, that is run efficiently with as little cost as possible. How to accomplish this is one of the main things this blog will focus on.
Until next time, let’s keep working to make this our most profitable year ever.