One of my favorite movie scenes is from The Jerk. Navin Johnson is working at a carnival guessing peoples weight. He is talking to Frosty, his boss:
It bewilders me how many professionals don’t know how to determine whether they are profitable. A business owner recently told me about a sales reps’ excitement of landing the $50k deal that had already cost $20k to secure and will cost another $30k to $40k to fulfill. Way to go!
I also find it interesting how profit has developed a negative connotation in so many business circles. Business cultural goals are considered personal, meaningful and someone enlightened. Profit goals are considered a “numbers guy” thing. I am a big believer in creating the right company culture - but fact is cultural goals cannot be met if the company is not profitable.
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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.
Navin R. Johnson: [bleakly] I've already given away eight pencils, two hoola dolls, and an ashtray, and I've only taken in fifteen dollars.
Frosty: Navin, you have taken in fifteen dollars and given away fifty cents worth of crap, which gives us a net profit of fourteen dollars and fifty cents.
Navin R. Johnson: Ah... It's a profit deal. Takes the pressure off. Get your weight guessed right here! Only a buck! Actual live weight guessing! Take a chance and win some crap!
Frosty: Navin, you have taken in fifteen dollars and given away fifty cents worth of crap, which gives us a net profit of fourteen dollars and fifty cents.
Navin R. Johnson: Ah... It's a profit deal. Takes the pressure off. Get your weight guessed right here! Only a buck! Actual live weight guessing! Take a chance and win some crap!
It is amazing how easy it is for business professionals to take their eye off of profit. I see this often in my business law / funding law practice. Key employees easily ignore profit while focusing on their client projects and immediate incentives – ignoring the fact that company profit gives them long term advancement potential. Business owners get tied up with client sales and revenue projections – ignoring the bottom line purpose of what they are building – to make profit.
It bewilders me how many professionals don’t know how to determine whether they are profitable. A business owner recently told me about a sales reps’ excitement of landing the $50k deal that had already cost $20k to secure and will cost another $30k to $40k to fulfill. Way to go!
I also find it interesting how profit has developed a negative connotation in so many business circles. Business cultural goals are considered personal, meaningful and someone enlightened. Profit goals are considered a “numbers guy” thing. I am a big believer in creating the right company culture - but fact is cultural goals cannot be met if the company is not profitable.
~~~~~~
Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.
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