Why Private Businesses Are So Focused On The Bottom Line

I was recently talking with a leader of a company who said his company’s (he doesn’t own it) goal was to go from a $50 million company to a $100 million company in the next two years. He explained that profitability was all the business focused on. I asked him why. He didn’t have a good answer.

I believe that if you continue to do the right things the right way, the money should follow. Many believe that strong-arm politics and bullying is the way to victory. We will agree to disagree.

If my business was a $50 million company and the goal was to get to $100 million, I would start with the people. Business can only have sizable increases if you have the right people in the right seat with the right focus and the right return. Asking your people to make the business more money doesn’t necessarily work in the culture of today’s work environment—one with more entitlement and less interest in business consistency and longevity. Reward and acknowledgement are critical for your team to be interested in driving the business forward.

Leadership decides to find another $50 million. Should the team accomplish this goal, what does that mean for them? A 10 percent bonus pool for that two-year achievement?

My business is not that big (yet), but, I absolutely understand that the easiest pathway to growth is your people. My job, as CEO, is to make sure that I have as many committed superstars as possible. My job is to enforce our brand’s KPIs and move the right people into the right seats. If I accomplish this, keep the cancerous negatives at bay, and reward my team for their triumphs, then growth is possible.

My share of the wealth plan is on a much smaller scale, but I still get it.

Now it’s your turn. What happens when you grow more? Do you make more money? What happens when you make more money? What is your end goal? What happens then? Do you have the opportunity to change the lives of the people who are investing alongside you? When I asked the leader of the future $100 million company what hitting that goal would mean for his organization. The answer was along the lines of, “I don’t know.”

Public companies typically leverage stock options. They give their teams the ability to be a part of the puzzle. The business goes up, and so does their team’s wealth. When your team wins when you win, and they feel pain when you don’t, they will be much more motivated to work alongside you to meet important goals.

People sell brands. People make brands. People grow brands. Not individuals. When you become super focused on growth, make sure your plan is not simply comp sales, increased executive leadership comp and increased valuation. Make sure your people are included in your puzzle. You will have a much better chance of making that magic happen.

Why are private businesses so focused on increasing sales? Hopefully, it’s for the right reasons—and that’s to change the lives of those who have been loyal to helping the team accomplish those extensive goals.