Opening a business will always have risks and
responsibilities that broaden as you grow. Overall, you have a commitment to
your business, your employees, and your community or customer base. Without a
doubt, it is clear that profit is critical to success, and every decision made
by an executive or business owner must be in the best interest of creating
profit. Of course, the responsibility of the livelihoods its employees and
happiness of its customers, should come first but without making a profit, that
is a moot point that will not stand.
So how do you identify those factors that characterize a
profitable business? A business is made up of internal and external factors
that help to create the number that deems a business profitable. The challenge
for business owners, executives and employees is to push the number up and to
the right as the business develops and expands. An experienced Executive knows
that profitability isn’t just a nice amount of money in the bank and cash to
burn. Great executive leaders know the market industry, potential hazards and
economic impacts that could change the landscape of profitability.
It is quite easy for anyone not involved in the business
directly to assume that internal factors are the most important. What this
means is if you have all your ducks in a row, and your business is operating
smoothly, then there should be no concern for profit loss. This assumption is
just not true as external factors offer variables that are uncontrollable from
within. The experienced executive knows better than to rely on internal factors
alone and assess, forecast and plan according to potential external outcomes.
External factors like shipping costs, fuel costs, crops and farming costs can
all factor into any market. Of course, the external factors are uncontrollable
from within the company the business practices can be optimized to best fit the
company’s strategy. There are many instances, where external factors can be
dismal to an industry's complete market profitability and competing companies
will struggle. However, the benefit of that decline is the potential for new
innovations and techniques.
Chady Salim has mastered profitability while working as a
business and technology executive for over 16 years in the telecommunications
industry.
