The profit myth

Not that she's any great guru of mine, but Coco Chanel was a wise old bird when it came to business.  One of her reported sayings is, 'Profit is sanity; turnover is vanity'.  To the public sector, 'profit' has often had heinous connotations:  it's about greed, moving money away from the people towards already-wealthy individuals.  But you only need to engage the brain for nano-seconds before that analysis falls to pieces.  Any business needs to generate profit in order to develop and expand.  Simply expanding turnover without trying to increase efficiency is a fool's game, says Coco.  But in a fast growing small-ish business, it's difficult to focus heavily on the bottom line when you're constantly re-investing - employing extra staff so you can win new business etc.  When I joined Ten in 2007 we turned over about £3.75m.  We are now about six and half times bigger than that.  Our constant debate is the extent to which we need to worry about the bottom line. 

At least we're not a PLC, where the whole business would be driven by analysts demanding to know how we will have generated increased profit by the next quarter. 

Or maybe that would be a good discipline.

Hmm.