When revenues exceed expenses, you’re profitable. Sounds simple enough, but as any business leader knows, the current economy has many finance pros carefully watching their financials to see if revenues really are exceeding expenses.
Long-term, unprofitable organizations tend to get caught in a vicious cycle: Lenders and investors shy away. Talented employees leave for greener pastures. Stock value diminishes, credit dries up, officer profit sharing goes away and vendors aren’t paid according to terms. With limited resources, these companies can’t pursue ambitious new business opportunities or make investments to sustain development and drive profitability. For companies without outside funding or credit, no profit means no capital and the cycle worsens.
That scenario keeps business leaders awake at night, our 2020 Brainyard survey of 361 business leaders shows. Increased profits are both a top success factor, and, along with achieving revenue goals, understandably a major source of anxiety for 2020.