Focusing On Growth vs. Profit
Posted by Buffy the Bison | September 12, 2022
Starting your business from the ground up is no small feat. Having to focus on both growing your company and making decent profit at the same time can make it even harder. How can you create a strategy that will do both? Let’s talk about it!
What’s the difference between growth and profit?
Knowing how to effectively use both growth and profit to your advantage will help your business in the long run. To do this, you must understand each of them individually as they both come with their own strengths.
As you develop your ideas and strategies, your company will begin to grow and you will see a steady increase in traffic. Growth however, can fluctuate. Depending on the changes you make, it can rapidly decrease or increase and it is important to see what works and what doesn’t.
As you recognize the things that draw new clients in, you can use that as a baseline to continue that growth. As this cycle continues, you can effectively grow your business to success!
With growth comes profit, and hopefully a lot of it! It’s easy to overthink and overstrategize how to make the most profit over a certain period of time, but when you put too much emphasis on making money, potential clients start to tell and lose interest.
However, profit matters and the key to it is finding a strategy that works for you and your potential clients. Developing a strategy that puts the needs of your base over your own will not only bring more profit in, but will be the most advantageous for you in the long run.
Using both to your advantage
Recognizing the difference between the two allows you to take their individual strengths and apply them towards your overall strategy to grow your business as a whole. However, there are certain times you should focus on one more than the other.
When should you focus on growth?
Some would say that growth is the most important factor to consider while making changes to your business. While yes, it is important, it’s also vital to recognize when to focus on it and when your aim should be targeted towards profit.
Let’s say that you are a small candle company and want to find a way to grow your clientele. One way you could do this is by opening up an Instagram page and providing content that would draw new customers in. Your goal would be to see engagement on posts and a steady increase in followers over time. As you post about your product, more people become interested in what you are offering.
In this instance, focusing on growth gave this company the ability to reach customers they couldn’t before and develop a way to get them to keep coming back.
When should you focus on profit?
Profit can make or break your business which is why it is vital to have a strategy that works for you. While growth can bring more profit in, you have to have an effective product or service that will draw clients in to begin with.
Let’s say you are the same small candle business and the Instagram page you created for growth isn’t working as effectively to drive sales as you had imagined it would. One way you could create profit is by creating tailored ads so you can reach individuals that would be perfect candidates for your product. Although you pay for advertising based on the social site you pick, in the long run, it drives more profit into your company.
Making profit is every business’s main goal, but the path there is challenging. Developing a product or service that people find important to them is the key to making it there.
Success in the long run
While growth and profit are important individually, the key to your success is recognizing that they play hand in hand. As you continue to grow and change your business, growth and profit will fluctuate, but developing a strategy that keeps both in mind will help you stay successful.
Building the foundation of your company is hard, but finding information on what to do next shouldn’t have to be. Check out our free guide to business growth and let us help you!