What does sale and success mean to you? Does it mean the same thing??
We believe businesses need to move past the idea that sales and success are the same thing, it is a misconception that sales are the best indicator of success in business.
Sales demonstrate the demand for the product or service, it shows that the business has value in the market. Yes, that is a good indicator that the business is in demand BUT Sales Growth… now that is a better indicator, sales growth show whether the business is growing or declining, whether the market values the product still, if the business is on the track and if the business is consistently delivering its business promise.
BUT this doesn’t tell us if the business is healthy and sustainable!
Can a business that is making consistent sales fail??
Yes – Take into consideration all costs and overheads of running a business, now the business isn’t turning over a net gain.
Did you know that 65% of insolvent businesses are profitable? Businesses fail due to bad management of cashflow.
So, what is a successful business? We like to think a successful business knows where it is going, is well managed and has a positive impact on the economy.
A healthy business will know the strength of its balance sheet, know whether the business will be around for years to come and have a business plan with a vision and a mission.