When revenues exceed expenses, you’re profitable. It’s a simple idea that’s now the primary concern on many business leaders’ minds. We now know that the U.S. gross domestic product fell 32.9% in Q2 and that hopes for a quick end to the effects of COVID-19 are fading as the summer has brought a resurgence of cases in many states. For many, the path to turning a profit won’t be through development for a while. So, what’s left is cutting expenses judiciously and working to optimize the revenue streams that now exist.
This spring, the pandemic led many business leaders to worry more about cash flow than profits. By summer, a follow up survey of 130 business leaders found cash flow, current accounts receivable and working capital were still the KPIs in leaders’ minds, with gross profit margin not far behind.
Good old-fashioned profitability is in style, and the good news is that with modern strategies, tools and techniques, most companies can achieve their cash goals. It’s a two-part process: Run smart and lean, and retain and build the customer base.