Profitability is defined as the degree to which a business or activity yields profit or financial gain.
I can share with you that for many years, while working for a previous business, that’s just how the owners operated. They never thought about the future, they just wanted to see money in the bank, that bills were being paid and employees were happy. Now while that is good for some, it’s not good for a true entrepreneur. No matter how I tried, I could not convince them to set goals, have a budget and analyze their financials.
While I did provide them with reports, they never seemed to care. Without tracking all of their financial information, they never knew whether they were profitable. Should they stay in business? Did they eventually want to retire? Did they want to sell their business? Without sound financial information, they wouldn’t be able to do any of that.
To sell a business, it takes many years to properly set the business up to sell. To get the most from the sale, planning needs to happen. There must be an exit strategy in place which is usually a long-term plan.
If you have more questions, I suggest consulting with an experienced bookkeeper.
Barbara Flynn, MS, SPHR, SHRM-SCP
