Profitable thoughts

By | December 29, 2004

Handling things wrong again today. I want to say all the right things. Be the one with vision and foresight. And I keep saying the wrong things. My mojo is way off.

Here is an example: I know from years of experience at Koko that small companies often make the mistake of thinking that short term dollars are more important than profitability. Cash flow is king they say. I may lose money on this deal, but we need the money for next weeks payroll. This is a mistake of bankruptcy proportions. A company should only do something unprofitable if they think that the effort involved will directly yield a profit in the future. Example: Invest in a big technology item like a laser cutter for sheet metal. This will allow you to be more profitable in the future by cutting costs for sheet metal construction and installation labor. Another example: Invest in building a technology product which you can resell easily rather than take on short term projects.

It takes vision and guts to choose the profit path. You have to see the big picture. Profit sustains a company forever. Project cash only pays next weeks payroll.

So anyway, I believe all of this whole-heartedly, but I can not seem to convince people that this is a truism. That profit is king and not short term cash. I remember when I tried to explain this to my partners at Koko. They didn’t want to believe me either. I think it is the WAY I am explaining it. I think I may be a terrible “convincer”.

In all of the biographies I have read, there always seemed to be a seminal moment when the hero gets his/her big break. Someone who believed in them and taught them how to accomplish what they dreamt. A mentor.

2 thoughts on “Profitable thoughts

  1. Dan Lipka

    There is only one place you have not looked and it is there only there, that you shall find the mentor.

    The business world is a complex place. I think I’ve learned a lot about business (and life) in my dealings with the stock market. Mostly its been philosophical, relating to an ability to choose the best choices regardless of what I think may be right. For example, I like a stock at $10/share so I buy some, than it goes down to $9. So I think, I liked the stock at $10 than it is an even better deal at $9. Although this sounds right, it is completely wrong. What I should be thinking is, I thought this stock was good, but I was wrong, I should get out now. However, that is not what I think, but I force myself to do the right thing. Doing the right thing is no guarantee, but it puts in the best position to succeed. I think short-term profit taking is the same.

    Reply
  2. fiat lux

    Some actors got “discovered” or a “big break” — many more became an “overnight success” only after years of patient effort. Just because it hasn’t happened for you yet doesn’t mean it never will.

    Plus, times have changed. The nature of business today is so temporary and transitory that it’s harder to find someone with the seniority, stability, and generosity to really be a help. Lots of people who might once have been mentors now have to worry about their own careers instead.

    Reply

Leave a Reply