Making Yourself Indispensable: Bottom Line Minded
In previous posts of the Indispensable series we discussed Training and Volunteering. Both of those tasks give you tools and leverage, but they can’t alone make you indispensable. You have to take those tools and positively impact the bottom line.
Often in lower rung positions cost and revenue are the furthest from your mind. However, your boss, or your bosses boss, replies to emails all day about those two subjects. Being conscience of the bottom line will set you apart from your counterparts.
During one of the more mundane required business classes we took a test that will probably stay with me for some time. The class was awfully boring, with the exception of an interesting leveraged buyout lecture, nothing was new.
The first part of the semester was a breeze and I coasted into the first exam. All essay questions, this was going to be easy. The last question of the exam was a seemingly easy question. “What is more important to a Business: Revenue or Profit?”
The answer is so simple now, but while I was in class, I did the typical over-thinking. My answer:
Both are equally important, however, importance varies depending on the user of the information. Revenue is an important figure used by marketers and sales force to asses and determine trends and sales efficiency. Profit is an important figure used by cost managers to help identify efficiency within systems.
That’s right, I blew that one. I was so deeply engulfed with my accounting classes and the accounting world that I didn’t see profit and revenue as actual money, I saw them as a theory, data, information, not an asset. Although my answer wasn’t wrong in an accounting class, I couldn’t have been further off.
I waited restlessly for the rest of class until we were ready to cover this particular question. I had replayed my response over and over in head, I was going to show this teacher, in front of all my classmates, that I was smarter. Oh silly ignorant me.
The teacher began “Almost all students got this question right, so can someone tell me what they put?” The first student replied to give their answer:
“Profit is more important. It doesn’t matter how much revenue you have, if you don’t have profit your business can’t grow and continue.”
So simple. So concise. So much more correct than my answer. I quietly cried a tear inside, slid my test under my notebook so as not to be discovered, and tried to hide the embarrassment I was sure everyone could see.
The fact is, I became so engrossed with my work, and single minded on accounting, that I missed the bottom line. I forgot what business was about, I forgot the single greatest reason business’s fail. I never felt so useless and dispensable in my life.
Now I go to work everyday conscience of how my actions affect the bottom line. In effect, I am thinking like a manager. I ensure timely work to keep costs down, I consider alternative processes to streamline work, I ask questions and bring up possible product combinations to offer a client. I strongly believe that by keeping an eye on the bottom line, I set myself apart from my coworkers and make myself indispensable.
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Tags: Bottom Line, Company Skillset, Finance, Indispensable
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February 7th, 2008 at 1:29 pm
Well, generally speaking, I would agree that PROFIT is more important than REVENUE. However, without revenue, there can be NO profit. So, actually, it starts there. And, in fact, if you notice some of the largest deals in Internet history, several of them still are not profitable operations (YouTube, FaceBook, etc.), yet were worth $1.6B and Millions to their purchaser.
February 8th, 2008 at 7:43 am
ARRiiVE - Thanks for the comment. However, I still believe profit makes the world go round. Being worth something and sustainable growth are two separate things.
Most companies can run for a period of time without profit thanks to investors and loans. Working capital comes from investors that believe there is a potential for profit, otherwise they wouldn’t invest. Youtube will do fine for a while because google believes the short-term losses will lead to gains in the long run. Fortunately, because google makes enough profit through their search engine and other programs, they can support this risky adventure; i.e. infusing youtube with working capital. If 10 years down the road youtube is still unprofitable, you will see fewer upgrades, and maybe even a sale; it wont be growing anymore.
February 8th, 2008 at 1:14 pm
I agree with you Brandon. It was just a point I felt had to be made. Take away the exception and even Amazon now has to make money after years of red ink.
My father liked to say “Cash Is King” and having been a small business owner, he definitely knew. I learned that lesson the hard way, myself, and can say that any entrepreneur who won’t dive in a toilet to chase a nickel is probably short for the world…
~Scott
February 13th, 2008 at 4:54 am
“Without revenue there is no profit”
True, but without a revenue-generating model, there will be no business. The dot-com bust taught people that you still have to have a business in order to get funding. The internet is changing everything, faster than some like, slower than some would like to believe.
Great article and comments.
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